Preamble

The House met at half-past Eleven o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Oral Answers to Questions — TREASURY

The Chancellor of the Exchequer was asked—

Productivity

Mr. Peter Brooke: If he will make a statement on trends in United Kingdom productivity. [141833]

The Chancellor of the Exchequer (Mr. Gordon Brown): To encourage long-term improvements in productivity growth, we are pressing ahead with labour, capital and product market reforms. We are establishing a Competition Commission, and opening up competition in the utilities and in other sectors. We are encouraging investment by cutting corporation tax, and cutting capital gains tax to a long-term rate of 10p. To encourage innovation, we are introducing the first research and development tax credit. To encourage new business dynamism, we are introducing a lower rate of small company tax, permanent capital allowances, and 100 per cent. allowances for the introduction of information and communications technology.
We are investing heavily in education and skills, and we are working with business, rejecting stop-go in favour of a stable monetary and fiscal policy. Productivity growth, which was at 1.3 per cent. when we came to power, is running at 2.4 per cent. in the last quarter of the financial year.

Mr. Brooke: Has the Chancellor observed that, while United Kingdom productivity rose sharply in 1999, net rates of return in manufacturing fell to less than a third of comparable rates in the United States? If investment is a key component of improved productivity, how do we end the vicious circle—especially when higher business taxation is helping to fund higher public sector investment?

Mr. Brown: Business investment as a share of national income rose to 14.5 per cent. last year. That is the highest rate that we have seen, and it is far higher than the rates that obtained under the Government of which the right hon. Gentleman was a member.
Moreover, we are seeing much-welcomed improvements in the introduction of new technology: most businesses now have e-commerce and information technology. There is also more investment in skills and education.
We are seeing improvements in all the drivers of productivity growth to which the pre-Budget report gave attention. Over a period the productivity growth rate is rising, and I believe it will continue to rise. The right hon. Gentleman will note that in America productivity growth was relatively low between 1992 and 1995, while employment was rising; then employment and productivity growth rose together.
The challenge in this country—I hope it is accepted on an all-party basis, because we are involving the Confederation of British Industry and work forces in the issues—is to combine high productivity with high employment. Of course, what would damage prospects of higher growth and higher productivity most of all is a return to the old stop-go and boom-bust that we saw under the last Government. [HON. MEMBERS: "Oh, no!"]
I know that the right hon. Gentleman agrees with me about the independence of the Bank of England. I hope that he also agrees with me about the importance of monetary and fiscal stability.

Mr. Stuart Bell: The House will have been amused by the Opposition's response to my right hon. Friend's comments. Is it not a fact that, during many years of a Conservative Administration, there was low productivity and low employment? Is there not a stark contrast—acknowledged even by the right hon. Member for Cities of London and Westminster (Mr. Brooke)?
Productivity rose in 1999. Is not the secret of our huge success, currently and in the future, high employment and high productivity?

Mr. Brown: I have considerable respect for the right hon. Member for Cities of London and Westminster (Mr. Brooke), but the fact is that in the late 1980s, when he was in the Treasury, productivity descended into a negative state. In 1996, when the Government of the day produced their own competitiveness White Paper, they said that productivity trends in both manufacturing and service
left us lagging behind all our other major rivals, including France and Germany.
It is to tackle precisely that problem that we have introduced changes. We have opened up competition policy by making the Competition Commission independent, in the same way as the Bank of England is independent in making decisions.
The Government are also moving forward in terms of labour market reform, capital market reform and product market reform. I repeat, however, that the challenge in this country is to produce high employment—which we are achieving—and high productivity, rather than returning to low employment and low productivity.

Mr. Edward Davey: Will the Chancellor not admit that the United Kingdom's productivity has been severely hit by the railway crisis? The Government's failure to increase transport investment early in the current Parliament has not only made the lives


of the travelling public miserable, but hit the British economy. Is it not time that the Government said sorry to commuters, and to British industry?

Mr. Brown: It is precisely because of the need to improve our infrastructure in the economy that we have reversed the long-term trend against investment in transport infrastructure. The Liberal party likes big figures. The £180 billion that we are investing—[Interruption.] The hon. Member for Buckingham (Mr. Bercow) is right. The Liberals have no means of financing such investment; we have.
I hope that the Liberal party will support our £180 billion programme of investment in transport. It is a programme of public and private investment. It is in the national economic interest, and I hope that members of all parties will feel able to support it. Unfortunately, the Conservative party will not fund that investment.

Gillian Merron: The Chancellor—unlike the last Government, who failed us—will be aware of the importance of engineering to constituencies such as Lincoln, where companies are well aware that increasing productivity requires a highly skilled work force. Will he consider ways of covering training costs for companies such as Alstom Power and Wyman Gordon in Lincoln, so that they can boost their competitiveness?

Mr. Brown: My hon. Friend is absolutely right that investment in education and skills is vitalto the future of this country. That is why, this year, education investment is increasing in real terms by 10 per cent. That is why, over the next four years, education investment will increase by 6 per cent. in real terms. That is why there are more than half a million more students in full-time or part-time higher or further education. That is also why we are investing in our schools. However, we know that the CBI, the TUC and all parts of industry and the work forces must now work together on a programme of skills upgrading. That is why we are introducing the new university for industry and why individual learning accounts are moving forward. It is also why all the tax incentives have been made available to enable people to get training in the new computer skills.
Those are the ways forward for the British economy, and they cost money. We need a Government who are committed to the levels of public investment in the economy that are necessary to end the neglect of the past 20 years. It is unfortunate that we have a Conservative party that wants to make huge cuts in public spending which would be completely unacceptable for the future of our economy. I believe that business, as well as the work forces, oppose that view.

Mr. Michael Portillo: Has not the Chancellor today further diminished his reputation for candour by his highly selective quoting of statistics? Does he not remember promising before the general election that he was going to turn around productivity in this country? Has he not achieved that in the most bizarre way? In the first half of the 1990s, productivity was increasing by 3.1 per cent., whereas, over the past three years, it has been increasing by 1.3 per cent—an exact mirror image. Is not the fact of the matter that,

industrially, his policies of extra regulations and extra taxes have taken us from success to failure and from competitiveness to uncompetitiveness?

Mr. Brown: The shadow Chancellor must first acknowledge the record of the previous Government. In 1996, they published a competitiveness White Paper saying that productivity in Britain was a real problem and that it had fallen behind that of France, Germany and the United States. That is the situation that we inherited.
Secondly, the shadow Chancellor must also acknowledge that, in the past three quarters, the trend rate has been 2 per cent, 2 per cent. and 2.4 per cent, and that, in America, expansion of employment was followed by employment and productivity growing together. In my view, that is exactly what will happen in the United Kingdom. Why? Because we are making the changes that are necessary—such as opening up competition, sponsoring research and development, encouraging innovation, encouraging enterprise that is open to all, and investing in education and skills.
If the shadow Chancellor could stand up and say that he will support our investment in the infrastructure of the economy instead of making public spending cuts, we would think more of what he says about the state of the economy. Will he support our public investment in transport and the infrastructure as well as in education?

Mr. Portillo: The previous Government told the nation that productivity was a problem after it had been growing every year by 3.1 per cent. Why cannot this Chancellor admit that he has a problem now that, year after year, it has been growing at 1.3 per cent? Did he not say that productivity was the fundamental yardstick by which a nation's performance would be judged? Is not the fact that, while he goes on telling the CBI and the Institute of Directors what to do, he has put £5 billion of extra taxes on business every year and £5 billion worth of extra regulation on business every year?
After the Vauxhall crisis, the Chancellor said that the Government are here to help. If they are here to help, let me tell the right hon. Gentleman what they should be doing. He is about to impose a £1 million energy tax on every car manufacturer in this country. Will he scrap that job-destroying tax—yes or no?

Mr. Brown: We are proceeding with the climate change levy, which was proposed by a committee chaired by Lord Marshall, the then president of the CBI, but it is being introduced with a tax cut in national insurance for industry. There is therefore no direct gain to the Treasury from introduction of the climate change levy. The shadow Chancellor will have to explain this. Although his environment spokesmen say that the Conservatives will implement the Kyoto targets, he will have no measures to implement them if he abandons both the fuel escalator and the climate change levy.
The shadow Chancellor has been more honest on other occasions about the state of the economy. When he went on to the "Today" programme, he said:
Well, Britain, luckily, under the last Government and under this, is pursuing an absolutely reliable anti-inflation strategy.


So he acknowledges the success of our policy. In another interview the right hon. Gentleman said this about taxes:
Even after three years of Labour Government, relatively, we are less taxed and less regulated than our continental partners on average.
Let us look at what he says about the economy as a whole. He said on the Jimmy Young show:
Governments are in a strong position when the economy is doing well and there is absolutely no point in denying that. I am not going to go about saying that the economy is not doing well.
Instead of attacking our policies, the shadow Chancellor should start to consider whether he has a policy. Yesterday's debate revealed to us that the Conservatives have no fiscal rules; they will not invest in the supply side, which is the infrastructure of the economy; and their monetary disciplines are suspect because they would sack Bank of England independence under certain circumstances, which they define as incompetence. At the same time they are promising tax cuts based on a surplus one year that they cannot guarantee for every year. [HON. MEMBERS: "Get on with it!"] They do not like it, do they? Until the general election we will tell the country that the measures that the Conservatives are proposing would bring the country back to stop-go and boom-bust.

Mr. Portillo: When will the Chancellor of the Exchequer admit that under him the economy is growing at 2.6 per cent. a year, which is less than the growth rate in the previous 15 years; less than the growth rate in the eurozone countries; and half the growth rate in the United States? Why will he not admit that our export share was 5.1 per cent. when he came to office whereas it is now 4.5 per cent? Why will he not admit that our productivity growth rate has been halved tinder this Government and is now half that in the United States? Why is he so pitifully complacent when there is so much that he has done wrong and so much to do in future?

Mr. Brown: The fact that the right hon. Gentleman's figures are completely wrong is illustrated by his reference to 15 years. Was the Conservative party in power for 15 years or 18 years? Was the growth rate of the economy over those 18 years not 2 per cent. rather than the figure he cites, and is not the average growth rate under us already 2.7 per cent? Let us remember what the Conservatives were saying three years ago. They said that there would be a recession—all of them. What happened? That year the economy grew by 2 per cent. Last year they said that our spending plans were completely unaffordable. Now they have to recognise that our spending plans are affordable. I believe that, over time, not only will it be revealed to the country that the Conservative party under the shadow Chancellor is the party of public spending cuts and higher unemployment, as it would abolish the new deal, but the Conservatives will have to face up to the fact that, with no fiscal rules and with tax cuts promised for every year on the basis of a surplus in one year, they will return the country to the time of boom-bust and stop-go—when the people who were in the Treasury included the shadow Chancellor.

Several hon. Members: rose—

Mr. Speaker: Order. May I remind the House that this is Question Time and ask for brief questions and, of course, brief replies?

Sterling

Mr. Denis MacShane: What assessment he has made of the impact of the value of the pound sterling since 1996 on exports. [141834]

The Financial Secretary to the Treasury (Mr. Stephen Timms): The appreciation of sterling relative to the eurozone currencies since 1996 has certainly caused some problems but, overall, exporters have still achieved robust growth. Exports of goods have risen by 25 per cent. over the past four years and by 7 per cent. over the past year.

Mr. MacShane: My question refers to 1996 because the main rise in the value of sterling happened under the former Tory Chancellor—another economic snafu he left his successor. Is my hon. Friend aware that every tonne of steel exported to the EU since 1996 has been exported at a loss, so that, while demand for exports has gone up, profits have gone down? Is he also aware that steelworkers, car workers, textile workers and farmers are fed up with being crucified on the cross of an overvalued sterling left to the Government by the Conservatives? While the only policy of the Opposition on this can he summed up in six words—"Europe, Europe, Europe. Out, Out, Out!"—the time is coming when many members of the public want a clear statement from the Government that the overvalued pound and undervalued euro is causing real damage to our economy.

Mr. Timms: I suggest to my hon. Friend that export growth has generally been much stronger than might have been expected given the exchange rate difficulties faced by exporters. The UK's exports to the European Union have grown much faster than have our exports to countries outside the EU. The average of independent forecasts shows export growth of more than 7 per cent. this year. The exchange rate differential causes problems for firms exporting into the eurozone, but improvements in productivity are helping to balance that. The 8 per cent. growth rate in the European Union between 1997 and 1999 has also helped. The UK steel industry is among the most efficient in the world. On that basis, I believe that it can look forward to a bright future.

Sir Michael Spicer: Productivity rates are crucial to this question, so why do the Chancellor of the Exchequer and the Prime Minister continue to distort the productivity figures? In particular, why have productivity rates fallen under Labour? That is demonstrated today by the Institute of Management Services index on productivity, which shows a continuing fall.

Mr. Timms: The figures have been made clear. The pre-Budget report contains figures that set out the precise position. The main rate of corporation tax is lower in the UK than in any big EU country and any major industrialised country in the world. As my right hon. Friend the Chancellor said, business investment has reached record levels, which is helping to boost productivity. The UK receives 40 per cent. of all investment into the European Union made by the United States and Japan, which also encourages better productivity. I point out to the hon. Gentleman that the


UK was ranked ninth on competitiveness this year by the World Economic Forum, as compared with 15th in 1996. We are making steady progress in the right direction.

Saving

Mr. David Tredinnick: If he will make a statement on his policies to encourage saving. [141835]

The Economic Secretary to the Treasury (Miss Melanie Johnson): The Government's strategy to encourage saving is to create the right environment for saving and the right incentives for people to save, and to provide information and education to help people to make the right saving choices.
The Government's initiatives include introducing the highly successful individual savings accounts, and developing stakeholder pensions, which widen people's savings opportunities for retirement. More than £28.4 billion was invested in ISAs in their first year—a third more than was invested in TESSAs and PEPs during their last and most successful year. Early indications show that ISAs are doing even better in their second year.

Mr. Tredinnick: Does the Economic Secretary recall the words spoken by the Chancellor before the last general election:
We will never raise the levels of investment in our economy if we do not encourage savings … ?
Is it not a fact that we now have the lowest savings ratio since 1963 and that the amount taken from people's pension funds by general taxation has increased by £5,000 million? How can the hon. Lady look my constituents in Hinckley in the eye and say that savings have improved under Labour?

Miss Johnson: We have done a lot to encourage savings, as is demonstrated by ISAs. Estimates show that low-income savers invested £3 billion more in their ISAs in their first year than they had in the previous year in their PEPs and TESSAs. The hon. Gentleman is also forgetting the fact that there is more investment in savings via the net wealth that is available. Net financial wealth has risen by 25 per cent. since 1997—more than twice the rise in income. The stock of wealth saved shows that people have money to invest and that it is being invested.

Sir Peter Tapsell: Does the Economic Secretary agree that, over the years, much of the nation's wealth has been invested in our gold reserves? She and I have had a lot of correspondence about that. Will she confirm that, since July 1999, the Treasury has sold 225 tonnes of Britain's gold for US $2,000 million? According to her last answer to me, 40 per cent. of that money has been reinvested in the euro. As the euro has lost one fifth of its value against the dollar during that period, is it not clear that the Treasury has frittered away huge amounts of the taxpayers' money?

Miss Johnson: The hon. Gentleman's ability to introduce this subject into any question is remarkable, and I compliment him on it. However, the answer is the same as those he has received on many occasions. We made the right decision to diversify our portfolio and we were only acting in line with decisions taken by a number of other

comparable countries at the same time. Perhaps the hon. Gentleman does not want to discuss the economy and the issues facing the Opposition. He does not want to face the fact that no fiscal rules have been offered by the shadow Chancellor, that we have the lowest interest rates for years, that we have built a stable economy and that we have put an end to the Tory years of boom and bust.

Mr. Oliver Letwin: If the Economic Secretary is able to tell the House, as she just has, that her policy is to encourage savings, does she think that it is a measure of the success of that policy that the savings ratio is now at its lowest level for 37 years? Does she agree that the more worrying trend is in gross savings, and that the proliferation of means tests is bound to provide a further disincentive to saving? Does she agree with the Chancellor, who wrote in the pre-Budget report:
Any further weakening would pose risks to the economic outlook … ?

Miss Johnson: The hon. Gentleman has not given the figures for the United States savings ratio, which are markedly lower than those for the UK savings ratio. [Interruption.] Yes, indeed, but he mentioned the United States. [HON. MEMBERS: "No, he didn't."] All right. [Interruption.] Okay, fine, but the fact remains that the United States has a much lower savings ratio than the UK. The hon. Gentleman is trying to avoid debating the current good state of the economy and the fact that we have returned the economy to stability. We have fiscal rules and we are able to provide an environment in which people feel confident enough to spend and to save money. The hon. Gentleman is avoiding that question because he does not want to refer to the Tory record. [Interruption.] The hon. Gentleman is getting very agitated about this subject. Frankly, that is unsurprising from a member of a party which was in office in the 1980s when 2 million people lost their jobs in a recession and in the 1990s, when nearly 2 million more people lost their jobs in a recession. We have got many more people into employment, creating 1 million new jobs. As a result of the prosperity and stability that we have created, people are able both to save and spend with confidence in Britain today.

Taxation

Mr. Michael Jack: How many new taxes and increases in tax rates he has introduced since 1997; and how much revenue has been raised by these measures. [141836]

The Chief Secretary to the Treasury (Mr. Andrew Smith): All changes to the tax system and their revenue consequences are included in the relevant Budget reports.

Mr. Jack: I am grateful to the right hon. Gentleman for that reply, as the reports confirm that, contrary to their manifesto commitment, the Government have introduced new taxes. The pre-Budget report shows that for this financial year and the next two, as a result of the introduction of new taxes such as the climate change levy, there is a trend of rising taxation on business as a percentage of GDP. Does the right hon. Gentleman agree


that in the light of yesterday's sad announcement concerning Vauxhall, the time is right for a thorough review of Labour's burden of tax on business?

Mr. Smith: On the pre-Budget report and the share of taxation in the economy, we observe that that share is lower this year, was lower last year and will be lower next year than planned by the last Conservative Government. Unlike the Conservatives, we have kept every promise that we made on tax. That includes the measures that we have taken on taxation to help business: the 3 percentage point cut in the main rate of corporation tax; the 3 percentage point cut in the small businesses rate of corporation tax; the introduction of the new research and development tax credit to help small businesses to innovate and to invest; and the changes that we have made to capital gains tax, reducing from 40 per cent. to 10 per cent. the tax on assets held for four years. That is the mark of a Government who believe in this country's businesses and are making sure that our taxation policies, as well as our policies for fiscal, monetary and economic stability, foster sustainable growth in place of the shambles and the boom and bust of the previous Government.

Mr. Peter L. Pike: Is it not important to remember that the overriding aim of the Government in taxation policy has been to make our taxation system fairer and help the poorest sections of the community, which we have done with income tax and so many other measures? Should we not remember what the previous Government did time after time, especially the intended 17.5 per cent. VAT on gas and electricity? We stopped that measure under the previous Government; VAT on gas and electricity has been reduced to 5 per cent., which has helped many of the poorest people in the country.

Mr. Smith: My hon. Friend is absolutely right to remind the House of one of the worst of the previous Government's broken promises. Contrary to everything that they said before their last Administration, they put VAT on fuel and it hit the poorest hardest. We promised to cut it to its lowest possible level—a promise made and a promise kept—just as we promised not to increase the upper or basic rate of income tax. Indeed, we have cut the basic rate of income tax, along with introducing the working families tax credit, the minimum wage, the new deal and measures not only to get many more people into work but to ensure that they are better off, and that the poorest gain most of all.

Mr. John Bercow: Why did the Chancellor of the Exchequer fail in his speech on the pre-Budget report even to mention the huge hike in national insurance contributions that will have to be paid by up to 1 million people who earn approximately £30,000 a year? Is the Chief Secretary proud of the fact that, as a result of that further stealth tax, something of the order of 20,000 nurses, 9,000 policemen and 23,000 teachers will face an additional burden of taxation of £200 a year?

Mr. Smith: Not for the first time, the hon. Gentleman asks yesterday's question. My right hon. Friend the Chancellor dealt very ably with all these matters then. Of course, there is nothing new in this—the matters to which the hon. Gentleman refers were announced in the

1999 Budget. Moreover, they were part of a package that increased the lower earnings limit, taking 900,000 people out of national insurance contributions altogether, and benefiting 16 million people in all by up to £2.10 a week, as compared with April 1999. That means that no one pays national insurance contributions on earnings below £87 a week. That, again, is a very good example of how our fiscal policies are reinforcing what we are doing in helping people off welfare and into work.

Debt Cancellation

Mr. Barry Gardiner: What progress the Government have made, in collaboration with the international community, in cancelling the debt for heavily indebted poor countries. [141837]

Ann Clwyd: If he will make a statement on progress in the reduction of third-world debt. [141849]

The Chancellor of the Exchequer (Mr. Gordon Brown): The Government have announced that the United Kingdom will renounce its right to receive any benefit from the historic debt owed by the 41 most indebted countries. Along with our policy of 100 per cent. debt relief for countries reaching decision point, I urge our international colleagues to follow the UK's lead.
I will be meeting the managing director of the International Monetary Fund, Horst Kohler, on Monday to review the latest progress towards achieving the target set by the IMF and the World Bank that 20 countries will reach decision point by the end of the year and ensuring that that debt relief is directly targeted at poverty reduction. On behalf of the Government, the Secretary of State for International Development and I have written to every Member of Parliament so that they can pass on this latest information to their Churches and other organisations.

Mr. Gardiner: I thank the Chancellor for that announcement. The thousands of people who have been part of the Jubilee 2000 campaign—constituents of mine and, I suspect, of every Member of this House—will think that this is one of the most significant things that the Government have done. I congratulate him on it.
I ask my right hon. Friend, in his discussions with colleagues in the international community, to urge them to do as we have done, and to look forward to expanding the conditions for heavily indebted poor countries, perhaps to include states that do not qualify at the moment, such as Nigeria, Bangladesh and Peru. They are major indebted countries. The burden in Nigeria is, I think, £3.5 billion owing to this country alone. Will he consider expanding the criteria? The whole community would welcome that a great deal.

Mr. Brown: My hon. Friend and other hon. Members have worked with the Churches and non-governmental organisations in the past year. The Treasury alone has received 300,000 cards or letters sent by members of the public. It is an indication of the public's support for debt relief that so many people and organisations, including all the Churches of the United Kingdom, are involved in this effort. I thank people for raising the issue nationally as well as internationally.
We have had talks with the Nigerian Government about their position. We are keen to help them as they reform their economy. At the same time, their position must be reviewed in relation to the oil revenues that they can now receive. My hon. Friend asked about other countries and debt. Over the next few months, the British Government will be involved with other Governments and organisations, internationally and nationally, to try to show that the link between debt relief, poverty reduction and sustainable development can be strengthened. We will also try to ensure that we meet the 2015 targets of every child being in primary education, of all avoidable infant mortality being cut by two thirds, and of halving poverty round the world. I hope that there will be bipartisan support for those efforts.

Ann Clwyd: No one could doubt the Chancellor's personal commitment to helping the poorest people in the world. It would be good if the churlish Conservative party were to acknowledge its debt to the Chancellor today.

Mr. James Gray: Our idea.

Ann Clwyd: I do not know what kind of comment that was, but it would be good if a Conservative Member got to his feet to acknowledge what the Chancellor has done to help the poorest people in the world.
Will my right hon. Friend spell out what reforms in particular he would like the European Commission to make to strengthen its commitment and deliver a little of the money that it has set aside for the world's poor, and use it as it should be used instead of keeping it in Brussels?

Mr. Brown: I am grateful to my hon. Friend and I applaud her efforts around the world to promote debt relief and international development. I know that she has worked with the Churches and other organisations in her constituency to promote the cause of debt relief.
As for the changes that the European Commission can make in its policy, the Finance Ministers managed to persuade it to contribute to the World Bank trust fund. Almost a billion euros will be invested in the World Bank trust fund so that the debts of the countries that qualify for the HIPC programme can be relieved. It is to the credit of the European Union that that decision was taken.
I hope that the aid and development reforms of the European Union will be involved in what I believe will be a worldwide initiative over the next year to tackle the problems of child poverty and poverty generally. New initiatives will put children into primary education-120 million children are not in it at the moment—and reduce the rate of infant mortality. At the moment, one in every seven children die before the age of five—a tragedy that must be prevented.

Dr. Jenny Tonge: My party congratulates the Chancellor and the Secretary of State for International Development on their welcome progress on this matter. Is the Chancellor concerned, however, about how long it takes for many countries to reach decision point? Will he say more about the social factors—health and education—that must be included in structural

adjustment programmes for those countries before the International Monetary Fund and the World Bank will accept that they have reached decision point?

Mr. Brown: I am grateful to the hon. Lady and her party for their support. Structural adjustment programmes have been replaced by poverty reduction strategies as the basis on which debt relief is provided. If a country has a programme that meets the poverty reduction strategy criteria, it is in a position to receive necessary debt relief.
The hon. Lady is absolutely right to say that there was a chance in 1997 that only one country would have passed through the HIPC process. Today there are 13, and there will be a special meeting of the IMF and World Bank boards next week to consider another seven, one of which may already be through by the end of this week. The aim is to put 20 countries through the programme by the end of the year—by the time of the meetings on 20 and 21 December—meaning that debt relief will move quickly to those countries.
I have considered the effect of debt relief and the differences that it has made. Countries, such as Uganda, where debt relief has been achieved are now able to consider reducing the primary school teacher-pupil ratio from 100:1 to 50:1 and to ensure that every child is in education in a school with a roof above his or her head.

Mr. John Bercow: It is to be hoped that the roofs would not be below their heads.

Mr. Brown: I am sorry that the hon. Member for Buckingham (Mr. Bercow) wants to reduce such an important matter to trivia.
Poverty reduction strategy papers were designed to achieve changes such as these, so that debt relief leads to poverty reduction. I hope that even more progress will be made in the coming year.

Miss Anne McIntosh: The whole House would congratulate the Chancellor on continuing the excellent work started by the Conservative Government at Montreal and would share his aim of ensuring that expenditure in indebted countries goes towards education, health and poverty reduction. Why, however, has he failed to implement the Organisation for Economic Co-operation and Development's convention on bribery? Is that not a reason why other countries have followed Britain's lead in that regard?

Mr. Brown: When we came to power, tax relief was available for bribes because of action that the Conservatives had not taken. That is amazing—one could receive tax relief for bribing someone in another country. We are taking action on those matters, and taking international action too.
I applaud the hon. Lady for her own work on debt relief. The challenge of the next year will require expenditure in the international development budget that the Opposition are not prepared to support. If we are to make progress on education, health and anti-poverty programmes, Britain must pay its share. That is why my right hon. Friend the Secretary of State for International Development has proposed expenditure of £600 million over the next three years. Why will the Opposition not support us on that?

Treasury Supplement

Mr. Paul Flynn: What plans he has to restore the Treasury supplement. [141838]

The Financial Secretary to the Treasury (Mr. Stephen Timms): None. However, consistent with our prudent approach, we provided in the draft re-rating order laid before Parliament at the end of last month for a Treasury grant to the national insurance fund for this financial year and next year in the unlikely event that the fund should need it.

Mr. Flynn: My hon. Friend will recall that the Treasury supplement was the great achievement of the last Liberal Government and was paid for 80 years because it was thought to be affordable by all Governments for most of the past century. If it were now being paid at the rate paid in the late 1980s, when the Conservatives cut it, it would be worth £20 a week on the basic pension.
The Government have been congratulated on giving pensioners by far the best deal that they have had for 25 years, but there is enough money in the fund to ensure that the link with earnings could be maintained until 2007. In considering the policy of the next Labour Government, and the one after that, will my right hon. Friend consider complete reform of the national insurance fund to make it a truly independent fund, run by independent managers and with funds invested on the stock exchange, so that we can have what pensioners really want—a guarantee that their incomes in retirement will not be affected by inflation, but will be protected?

Mr. Timms: The intention has always been that the national insurance fund should operate on a pay-as-you-go basis. In recent years, there has been a grant from the Treasury, but that has been in times of short-term difficulty, such as in 1993–94 as a result of the boom-and-bust policies of the previous Government. Importantly, there will be significant new demands on the national insurance fund, for example, from pensions reform through the introduction of the state second pension.
My hon. Friend is right about the package of improvements that we have introduced and announced for pensioners, which has been widely welcomed. He is right that that is the best prospect for pensioner incomes that we have had for a long time. It would be a mistake to attempt to use a Treasury grant for a long-term spending commitment, in particular an indefinitely escalating one, which an earnings link would represent.

Interest Rates

Mr. Ben Bradshaw: What has been the average level of interest rates set by the Bank of England since May 1997. [141839]

The Chief Secretary to the Treasury (Mr. Andrew Smith): Since May 1997, interest rates have averaged just over 6 per cent. as compared with 10 per cent. in the years of the previous Government.

Mr. Bradshaw: Can I assure the Minister that my constituents remember all too well when interest rates

were 15 per cent. under the previous Conservative Government because many of them lost their homes, businesses and jobs? Has my right hon. Friend had a chance to calculate what the average mortgage payer has saved since Labour came to power? If so, may we have those figures, because they will be useful in the forthcoming general election campaign?

Mr. Smith: I am grateful for my hon. Friend's question. He is right to remind the House what a terrible price people paid for the high level and volatility of interest rates under the previous Conservative Government. He rightly reminds us that interest rates were above 15 per cent. for a whole year. One and a half million home owners suffered negative equity and 250,000 homes were repossessed between 1990 and 1993 alone. My hon. Friend invites me to calculate the benefits that home owners with mortgages have received from the lower and more stable interest rates that we have brought about. I can confirm that I have been able to do that calculation. Under the Conservatives, mortgage rates averaged 11 per cent. as compared with 7 per cent. under Labour. On a typical mortgage, that means a saving of £1,000 thanks to Labour's prudence and economic stability.

Mr. Richard Ottaway: But can the Chief Secretary confirm that his plan to scrap the pound means scrapping the Monetary Policy Committee? Can he confirm that, at the next election, there will be just one party campaigning for interest rates to be set by an independent Bank of England—the Conservative party?

Mr. Smith: That is an extraordinary question, especially given the fact that the shadow Chancellor has been threatening to take away from the Monetary Policy Committee the right to determine interest rates. He is the one who says, "No, I could do it better. I consider them to be incompetent." What a cheek that is against the background of the Conservatives' record in government of those variations in interest rates—15 per cent. for more than a year.
Let us remember the effects that the shadow Chancellor's policy would have on stability. First, he says that he has a tax guarantee that turns out not to be a tax guarantee. Then he says that he will make £16 billion of cuts, but he cannot say where they will come from. Then he says that it is £8 billion of cuts. When asked where they can be made, he says that it is £5.3 billion of cuts, but when one looks at those one finds that some are not even in the Budget and some are savings that we are already making.

Mr. Speaker: Order. It would be best if the Minister talked about his own policy.

Mr. Smith: The Conservatives' sums do not add up. Where we are providing stability, they would destroy it.

Fiona Mactaggart: I urge the Minister not to take advice from the Conservative party on interest rates when, in the first 13 years of the previous Conservative Government, they were under 9 per cent. for only five months. In the last five years of Tory Government, they were higher than they have been under Labour. Throughout that time, we were told that we should have


high unemployment so that we could have low interest rates. Unemployment was more than 2 million for most of that time. As I recall, it was boom for interest rates and bust for workers. Can my right hon. Friend assure us that he will not return to that?

Mr. Smith: My hon. Friend is quite right; people are better off with Labour and I have no intention of taking the advice of the Conservatives.

Aviation Fuel

Mr. Gerald Howarth: How much tax was raised on AVGAS aviation fuel in (a) 1990, (b) 1997 and (c) 1999. [141840]

The Financial Secretary to the Treasury (Mr. Stephen Timms): The amount of excise duty was £4.8 million in 1990, £7.5 million in 1997 and £11 million in 1999.

Mr. Howarth: I am most grateful to the Minister for that reply. He will be aware—as will many of his right hon. and hon. Friends—that Britain is one of the world's leading aerospace countries, with a long history in aviation. Is he also aware that our flying training organisations are finding life extremely difficult at present? That is not simply because of the increased cost of crude oil, but because of the additional burdens imposed on them by new flight crew licensing requirements—and the need to invest about £4,000 per aeroplane in order to provide suppression of commercial radio stations by the extension of the FM band. Such is the burden on flying training organisations in this country that, for example, British Aerospace has moved its flying training from Perth in Scotland to Spain, where it saves 50 per cent. of its costs.
I suggest to the Financial Secretary that he might do something to help that important component of one of Britain's leading industries by cutting the rate of fuel duty—[Interruption.] It is a fairly modest amount of money. He might also try to help in other ways, because the industry is struggling greatly at present.

Mr. Timms: I agree with the hon. Gentleman that the UK aerospace industry is thriving; it is doing extremely well and is a shining example of success in the current British economy. On aviation gasoline duty, it is the case that, since 1982, the rate has been set at half the duty on leaded petrol—previously, it had been set at the full rate. In 1982, the Government of the day reduced it to half rate; that was a compromise between the view that there should be no duty, as, by international agreement, no duty is levied on jet fuel, and the view that aviation should bear the same duty burden as other forms of transport. The compromise reached at that time was right. I continue to support it.
My right hon. Friend the Chancellor cancelled the escalator on fuel duty, introduced by the Conservatives in 1993. He announced a freeze on fuel duty for the coming year. The package of measures that he announced on fuel duty has been widely welcomed.

Mr. Geraint Davies: Does my hon. Friend agree that there is an argument for a review of

aviation tax—especially given both the differential with the tax on cars and the environmental impact? Does he agree that if such a review were to take place, in an internationally harmonised framework, there is an argument that some of that money should be hypothecated to areas near airports, where environmental damage and noise are greater—in particular, in Croydon?

Mr. Timms: I think that there is a case for taxing aircraft fuel using international criteria, but at present that is excluded by international agreement. However, we have supported action through the International Civil Aviation Organisation to remove that exemption. We have also supported a request for a European Union study of the implications of taxing aviation fuel in the EU.

Taxation

Mr. James Gray: What percentage of GDP he estimates will be taken in tax in 2000–01; and what was the equivalent figure in 1996–97. [141841]

The Chief Secretary to the Treasury (Mr. Andrew Smith): Figures for taxes and social security contributions, as a proportion of gross domestic product, are shown in tables B10 and B26 of the pre-Budget report.

Mr. Gray: One sometimes wonders why the Minister cannot answer a simple, straightforward, factual question with a simple, straightforward, factual answer. Will he allow me to give him and the House the figures? In 1997, the percentage was 35.2 per cent; in 2000, it is 37.3 per cent; and in 2001, it will be 37.5 per cent. If the working families tax credit is included—not as a tax reduction but as an addition to public expenditure—the percentage becomes 37.8 per cent. Why will the Minister not simply admit to the nation that tax has gone up by £25 billion a year—the equivalent of lop in the pound on income tax? Those are the facts. Why cannot he stand at the Dispatch Box and admit them?

Mr. Smith: I have already answered that question. I point out to the hon. Gentleman that, for 2000–01, the Conservative plans were for tax at a proportion of 37.6 per cent., rising in 2001–02 to 38 per cent. Moreover, he and the whole House will be aware that we had to sort out the millstone of debt and the financial mess that we inherited from the previous Administration—borrowing of £28 billion and the £350 billion debt. We have sorted that out, providing the platform for stability, prosperity and opportunity for all that we offer to the people.

Mr. Andrew Reed: First, will the Minister confirm that Britain remains one of the lowest taxed countries in Europe? Secondly, and more importantly, will he tell the House exactly how much each year it cost every family in this country to repay the debt that we inherited from the Conservative party? How much money was wasted on repayments each year on that borrowing of £28 billion? What did that mean for every family in this country?

Mr. Smith: My hon. Friend is right. We were spending more on servicing debt than on the nation's schools. It is important for people to understand that of every extra


pound that the previous Administration raised in tax, no less than 42p went on servicing debt interest and meeting social security benefit payments. With our spending plans, we have got that figure down to 17p.
My hon. Friend is also right to refer to the comparisons with Europe: 10 member states of the European Union have a higher tax ratio than the United Kingdom. Our share is 1.1 per cent. lower than that of Germany, 6.4 lower than that of Italy and 10 per cent. lower than that of France.

Mr. Matthew Taylor: Can the Minister confirm, however, that there is a flip side to the coin? The Government say that they are taxing less than the Conservatives had planned to tax. The Minister is right about that—there is a fundamental flaw in the Conservative case—but the flip side is that the Chancellor, who is now Miss Bountiful and spending more, cut services as Miss Prudence at the start of this Parliament. Because of those cuts, the share of the national cake spent on health, education and pensioners will be less over this Parliament than the Conservatives spent in the last Parliament.

Mr. Smith: The truth of the matter is that the share spent on those priority services is rising, and rising sharply. Because we have been able to cut the cost of social security payments and of debt interest, more than 80 per cent. of that extra spending is going to the priority areas of health, education, investment in transport and fighting crime. Although I welcome the hon. Gentleman's support in exposing the fallacy of the Conservatives' arguments, he should also recognise that if we had not taken the tough decisions necessary to get the economy and the public finances straight, we should not have been in the position to invest in and improve our public services in the way that the British people want.

Euro

Mr. Desmond Swayne: What assessment he has made of the extent to which United Kingdom interest rates have converged with those in the eurozone. [141842]

Mr. Nicholas Winterton: What estimate he has made of when the UK will join the single currency. [141846]

The Chancellor of the Exchequer (Mr. Gordon Brown): The Government have set out five economic tests, which will have to be met before any decision to

join the single currency can be taken. The Government will make another assessment of the five tests early in the next Parliament.

Mr. Swayne: Will the Chancellor now address Question 10?

Mr. Brown: The answer is that we will make an assessment early in the next Parliament. That is exactly what we will do.

Mr. Winterton: The Chancellor has emphasised the importance of business costs, so will he tell British business that the cost of entry to the euro is likely to be some £33 billion? How does he equate that with his desire to keep business costs down and this country's ability to take decisions to contain inflation?

Mr. Brown: Precisely because we have to look at all issues in relation to this matter, we have our five economic tests. The problem with the Conservative party is that there are some—

Mr. Winterton: Answer the question.

Mr. Brown: Precisely because of issues that are raised by the hon. Gentleman and others, it makes good economic sense to assess those matters in an appropriate way. That is why we have set five economic tests: the effects on investment, on financial services, on employment and on the flexibility of the economy and whether there is sustainable convergence. All the issues that he raises can be dealt with as we examine those five assessments.
The hon. Gentleman's problem is that, if he thinks that the matter should be dealt with by a prudent examination of the five tests, he will support leaving the issue open and not ruling it out on principle. However, at one and the same time, some Conservative Members say that we must look at the issue as a matter of detail and others say that they will never join, on principle.
I understand that the hon. Gentleman is a member of Conservatives Against a Federal Europe. "John Major"—[HON. MEMBERS: "The right hon. Member for Huntingdon."] Conservative Members do not like hearing their own policy. I think that the House would like to know what they subscribe to. "John Major", it says—[Interruption.] This is very interesting—

Mr. Speaker: Order. Perhaps this is a matter for the next Question Time.

Mr. Brown: rose—

Mr. Speaker: Order. It is now time to move on to business questions.

Business of the House

Mrs. Angela Browning: Will the Leader of the House give the business for next week?

The President of the Council and Leader of the House of Commons (Mrs. Margaret Beckett): The business for next week is as follows:
MONDAY 18 DECEMBER—Second Reading of the Vehicles (Crime) Bill.
Motions relating to the Draft Millennium Commission (Substitution of a Later Date) Order and the Draft Apportionment of Money in the National Lottery Distribution Fund Order 2000.
TUESDAY 19 DECEMBER—Motion relating to the Draft Human Fertilisation and Embryology (Research Purposes) Regulation 2000
Estimates Day [1st Allotted Day—Half Day]. There will be a debate on Urban Regeneration in England. Details will be given in the Official Report.
At 10pm the House will be asked to agree all outstanding estimates.
WEDNESDAY 20 DECEMBER—Second Reading of the Hunting Bill.
THURSDAY 21 DECEMBER—Motions on the Social Security Benefits Up-rating (No. 2) Order and the Guaranteed Minimum Pensions Increase (No. 2) Order.
Motion on the Christmas Recess Adjournment.
FRIDAY 22 DECEMBER—The House will not be sitting.
Hon. Members will wish to be aware that the House will meet at 9.30 am on Thursday 21 December for questions to my right hon. Friend the Minister of Agriculture, Fisheries and Food.
The provisional business for the first week back after the Christmas Recess will include:
MONDAY 8 JANUARY—Second Reading of the Homes Bill.
It is not possible at the moment to give the House all the business for the week beginning 8 January. That will be announced next week following discussion through the usual channels.
The House will wish to know that on Wednesday 17 January, there will be a debate relating to sport in European Standing Committee 'C'. Details of the relevant documents will be given in the Official Report.
I should also like to inform the House that the business in Westminster Hall for the last Thursday this year will be:
THURSDAY 21 DECEMBER—Debate on British Trade International.
[Tuesday 19 December 2000:

Class Vote III, Vote 1 (Housing, construction, regeneration, regional policy, planning and countryside and wildlife, England)

Wednesday 17 January 2001: 
European Standing Committee C—Relevant European Union documents: COM (99) 644:The Helsinki Report on Sport; COM (99) 643: Doping in Sport; Unnumbered EM

dated 23 November 2000: Declaration on Sport. Relevant European Scrutiny Committee Reports: HC 23-viii, HC 23-xiii and HC 23-xxxi (1999–2000).]

Mrs. Browning: I thank the Leader of the House for giving us the business for next week. I wish to make two comments about it. First, the Second Reading of the Vehicles (Crime) Bill is scheduled for Monday whereas the Second Reading of the Hunting Bill will be on Wednesday. That will cause a great deal of inconvenience to Members who had hoped to attend the House to hear the Hunting Bill debated on Monday. I hope that the right hon. Lady has not changed the order in which the Bills will be debated simply to pray in aid the fact that the Government have put the issue of law and order before that of hunting.
Secondly, I have said several times before that it would not have been acceptable for the House to have debated embryology and then had a deferred vote. I thank the right hon. Lady for ensuring that the debate will be held at a time when Members can cast their votes following the debate on the subject. Conservative Members will have a free vote on the subject, and I am sure that she will confirm that Labour Members will have a free vote, too. It is a matter of conscience, and individual Members should cast their vote as they think fit.
Despite the fact that we are near the end of term, an important matter has occurred this morning and it merits the House's attention. Will the Leader of the House consider whether we should have a debate on the matter shortly? I am referring to this morning's Home Office press release announcing the names of the electoral commissioners. That was a surprise because on 6 December my right hon. Friend the Member for Maidstone and The Weald (Miss Widdecombe) tabled a written question asking when commissioners were to be appointed. The answer given by the Under-Secretary of State for the Home Department yesterday at column 181W gave no hint of the names or when they would be released. Surely that should be corrected and the House should have a chance to discuss the matter because it is relevant to the Political Parties, Elections and Referendums Bill, which was guillotined in the last week of the previous Session, so restricting the opportunity for hon. Members to address that issue.
Why will the House have to wait until mid-January before the electoral commissioners are appointed, as the Home Office press release states? Surely we could debate that in the coming week and have them in place for the new year. Will the Leader of the House consider that because it is important and needs to be addressed? Will that decision not further complicate the implementation of the Bill's main provisions on donations and expenditure on 16 February if the matter is not dealt with until January next year? I hope that the Leader of the House will share my concern about the way in which the business has been handled and the disrespect it shows to Members of the House for announcements to be made without providing a written answer or an opportunity for us to discuss it.

Mrs. Beckett: First, I can certainly assure the hon. Lady that we moved the debate on the Vehicles (Crime) Bill because we wanted to change the order of business; the decision had no relevance to the issue of what might come first. Looking back as, sadly, Opposition Members rarely do, to their last Queen's Speech in the 1996


Session, it is clear that the first Bill they tabled for debate was the Hong Kong Economic and Trade Office Bill. The notion that there is something unusual about the order in which we take Bills is not well founded. However, I assure her that the decision was simply a matter of trying to get a good pattern of debate for the following week, which business managers always strive to do.
The hon. Lady also asked whether the Labour party was committed to a free vote on embryology. I am pleased to hear that her party is to have a free vote, although I would have anticipated that. However, I remind her that when the Donaldson report was published on 16 August, the Government said that they would lay regulations to give effect to its recommendations so that they could be followed through, and those regulations would be laid before the House so that it could reach its decision on the basis of a free vote. There is no question that it will be anything other than a completely free vote.
As for the Home Office press release, I am afraid that I am not familiar with precisely what was said or why, and, to be perfectly honest, I am not entirely sure of the hon. Lady's point. However, the Political Parties, Elections and Referendums Act 2000 has been extensively discussed. People are aware of the issues that arise from it. I understand that the House is interested in who the commissioners may be, but I am not aware of a suggestion that we should debate those appointments. Indeed, successive Governments have not thought that there should be accountability, other than through Ministers, for appointments that are made through the proper public appointment process.

Mr. Gordon Prentice: Four of the five wettest years on record in the United Kingdom occurred in the 1990s, but in other parts of the world the desert is advancing at a truly alarming rate. Given that there is a United Nations conference in Bonn on desertification as I speak, and that my right hon. Friend the Secretary of State for International Development recently published a White Paper that touches tangentially on the issue, can we have an early debate on it?

Mrs. Beckett: I am not entirely sure whether my hon. Friend is suggesting that we should have an early debate on desertification. I understand that there are frequent discussions about climate change, of which desertification is one aspect, and I share my hon. Friend's view, as I am sure all hon. Members do, that it is a serious matter. I fear, however, that especially as, happily, whatever our other problems up to now, no one has suggested that deserts are spreading in Britain, I cannot find time for an early debate on that.

Mr. Paul Tyler: Will the Leader of the House pay attention to concerns expressed throughout the House about the constitution of the Human Rights Joint Committee, which is on the Order Paper? Do the Government intend to allow the Committee to have a completely free choice of its Chair? The Committee will have a role similar to that of the Public Accounts Committee and the Environmental Audit Committee, so will the Government make certain that its Chair is taken by an Opposition Member, rather than a Government supporter, in common with those other Committees?
I endorse the congratulations to the Government on listening to the views of many Members about the timing for the motion on the draft Human Fertilisation and Embryology (Research Purposes) Regulation 2000, which is now in a much better place in our programme.
When will we receive a comprehensive response to the royal commission on long-term care? Statements have been made, and references were made during the debates on the Gracious Speech, but is the coming crisis in the national health service, which is causing so much concern to Members and their constituents, being viewed in the context of bed blocking and the relationship between health and social services authorities?

Mrs. Beckett: Yes, we are making progress on appointing the Human Rights Joint Committee, and, as the hon. Gentleman will know, it is always Committees that deal with such issues. As for the comparison that he drew with the Public Accounts Committee and the Environmental Audit Committee, I am not aware of any suggestion that the Human Rights Joint Committee is in the same category and should therefore be chaired by an Opposition Member, but that will no doubt emerge in due course.
It is widely understood in the House that bed blocking is causing difficulties in the NHS. The hon. Gentleman asked for a further statement on long-term care, but that will be dealt with when the NHS Bill comes before the House, so I anticipate that there will be opportunities to discuss the issue then and it is unlikely that there will be a further, separate statement on it.

Mr. David Chaytor: May I draw my right hon. Friend's attention to the delay in, and possibly even the postponement of, the publication of the long-awaited Green Paper on radioactive waste management. Does she accept that the delay means that the Government effectively have no policy on radioactive waste management, and have not had one since the previous Government's abandonment of the plans to build an underground repository at the Sellafield complex? Will she assure the House that the Green Paper will be published early next year? If that is not the case, will she find time for a debate on this most important environmental issue?

Mrs. Beckett: My hon. Friend is right to say that this is an important issue. It has considerable implications for the long term, and it will take considerable time to implement once policy details have been thrashed out. It is important that we try to get the first steps right. I anticipate that when the consultation paper is published there will be a major programme of discussion and research, as well as decision making. I fear that I am not up to speed with the intended timing of that, but my colleagues will want to bring the Green Paper to the House when it is ready, although they no doubt hope that that will be as early as possible. I shall certainly draw my hon. Friend's remarks to the attention of my relevant right hon. and hon. Friends so that if they have any further information, they can let him know.

Mr. Patrick McLoughlin: Will the Leader of the House arrange a debate on the textiles industry? She will know that there have been severe job losses in the industry in the east midlands. We often have


statements from Ministers when large job losses are announced, but the losses of several companies in the textiles industry can have a devastating effect on a region.

Mrs. Beckett: I am aware that there is great and long-standing concern about the future of the textile industry. I am also aware of the specific concerns the hon. Gentleman raises—indeed, the other day, my hon. Friend the Member for Amber Valley (Judy Mallaber) highlighted the concern felt in the midlands. The hon. Gentleman will know that the Government office for the east midlands is seeking to co-ordinate help from various public bodies in the area and that a rapid response unit is in place to help and support people through the difficulties in the region. As he is well aware, the problems in the textiles industry are of long standing; successive Governments have struggled to overcome them from time to time and with some success, but there is no easy solution.

Ms Rosie Winterton: I know that the parliamentary timetable is extremely full, but has any progress been made on finding time for a debate on Lord Phillips' report on BSE? The families of those who have died of new variant CJD in my constituency are anxious for Parliament to debate the report, and there are worrying reports in today's media about another potential cluster. Can my right hon. Friend provide any reassurance?

Mrs. Beckett: I can certainly reassure my hon. Friend and the House that the Government have every intention of providing time for a major debate on the subject. She will recall that, when my right hon. Friend the Minister of Agriculture, Fisheries and Food announced the outcome of the Phillips inquiry, he made it plain that the Government would find time for a debate, after a reasonable period had elapsed. He was anxious to ensure that sufficient time was allowed for people to study the 16 volumes of the report and take full account of the in-depth study that the inquiry team carried out, and for discussions to take place with families that have been affected. Therefore, although I anticipate a debate taking place, I cannot say when it will take place. I assure my hon. Friend that the Government will bring the matter to the House.

Mrs. Ann Winterton: The right hon. Lady will be aware of growing concern felt by hon. Members on both sides of the House about the fact that human cloning matters are to be introduced by regulation on Tuesday. Bearing in mind that those matters were not discussed during the passage of the Human Fertilisation and Embryology Act 1990 and that many hon. Members on both sides of the House believe that they should be the subject of primary legislation rather than regulations, will she be courageous and postpone the debate until those matters can be fully considered?

Mrs. Beckett: With respect, last week the Opposition were pressing for the debate. I should say first that the regulations are not human cloning orders and it should not he allowed to slip on to the record of the House that they are. Indeed, if the hon. Lady reads the Department

of Health memorandum, which, as she may be aware, is already in the Vote Office, she will see that it states explicitly and in terms:
These regulations do not permit research leading to human reproductive cloning.
Therefore, the matter is not as she describes it.
As I pointed out to the hon. Member for Tiverton and Honiton (Mrs. Browning) a minute or two ago, the report that recommended that regulations should be laid before the House was published in August, at which time the Government made it plain that we would give the House an opportunity to reach its decision on the recommended regulations on a free vote. The Government made time for a debate in principle and we published the regulations in draft—which we were not by any means compelled to do. The draft regulations have been amended following representations, which proves the value of publishing them in draft form. There will be a further debate tomorrow on the broad issues, but focusing on the draft regulations, without the House being required to reach a conclusion. Then, on Tuesday, we shall have a further, fuller debate, followed by the House having an opportunity to vote.
I do not think that the Government can, in the slightest degree, be criticised for having provided some 10 hours now in which to debate the issues and the substance of the regulations, for having published them in draft, and for requiring the House to reach a conclusion only later and after a longer debate than is usual. The Government are perfectly entitled to take regulations on an hour and a half debate after 10 o'clock, but we have not done so because we recognise the concern and the interest felt in the House. I know that the hon. Member for Congleton (Mrs. Winterton) disagrees violently with our proposals and she is perfectly entitled to do so, but it is not quite fair of her to pretend that the Government have not more than done our duty by the House in giving the House an opportunity to decide.

Angela Smith: My right hon. Friend the Leader of the House will be aware that it is about a year and a half since the minimum wage was introduced nationally. Is it not time to have a debate so that we might review its implementation? Those of us who served on the Committee that considered the National Minimum Wage Bill are aware of the scaremongering of Conservatives, who said that 1 million jobs would be lost and that pensioners, the disabled and people working for charities in the voluntary sector should not receive the minimum wage. While we debate the operation of the scheme now, might we not consider a timetable for the removal of the temporary youth rate?

Mrs. Beckett: I know that my hon. Friend and others served long hours on the National Minimum Wage Bill in Committee and thoroughly enjoyed themselves, thereby giving the lie to any suggestion that Members are not prepared to work hard for a worthwhile cause. They are, however, reluctant to spend long hours on trivia. It is right that the minimum wage arouses great interest on both sides of the House.
I understand the attraction that my hon. Friend sees in having an opportunity to debate the errors of the Conservative party, and, as far as I am aware, the continued wish of Liberal Democrats to have a regional


rate rather than a national rate. I understand also her wish that there should be a review of the youth rate. She will know that the Low Pay Commission is taking evidence about it. In that sense, perhaps a debate would be timely. I cannot undertake to find time for such a debate on the Floor of the House, but my hon. Friend might use the opportunities afforded by Westminster Hall.

Mr. Archy Kirkwood: The Leader of the House will know that irrespective of the outcome of the decisions that will be made in the Fisheries Council today and tomorrow about total allowable catches for pressure stocks next year, the fishing and processing sectors of the fishing industry are facing a uniquely difficult year. There are some conservation and technical issues that will flow from the decisions on TACs today and tomorrow. Will the right hon. Lady try to find time early in January for a debate on the Floor of the House so that these important matters can be considered against the background of the uniquely difficult circumstances that the industry is facing?

Mrs. Beckett: I understand fully the concerns that the hon. Gentleman expresses. He will know that the Government regretted the fact that, owing to timing of information coming from Brussels, it was not possible to have the normal pre-Council debate on the Floor of the House. I take his point fully on board and I understand his anxiety for a debate relatively early in the House. The Government will have to balance that—we have already introduced 10 of the Bills in our programme, and obviously we are anxious to get them through their Second Reading stage and start to feed them into Committee—against perfectly proper pressure for the debate that the hon. Gentleman seeks. We take seriously the point that he is making.

Mr. Ronnie Campbell: Will my right hon. Friend the Leader of the House find time for a debate on miners' compensation payments? We know that the Government have ring-fenced the money and put it aside. It is not good enough that some miners, especially the older ones—26,000 since court proceedings began—have died without receiving a penny. Is it not about time that we had a debate to ascertain what is happening with the scheme and who is holding back its implementation?

Mrs. Beckett: My hon. Friend is entirely right. It is a source of considerable irritation to me and to my right hon. Friend the Secretary of State for Trade and Industry that something that we sought to get under way as speedily as possible in the early months of this Government is still not going through at the speed that everybody wishes. I hope that my hon. Friend will know that there have been some expedited offers since September, and that some increased offers were made in mid-October. I share his concern, as do my right hon. Friends the Secretary of State and the Minister for Trade, that there is continued delay. I can assure him that they are doing everything they can to speed things up. I cannot find time for a special debate on the matter on the Floor of the House; my hon. Friend may think that Westminster Hall might be a good place to discuss it.

Mr. Peter Brooke: Given the curious innovation of the Secretary of State for

Defence being absent from the Queen's Speech defence debate, which had an H. M. Bateman quality and caused no little embarrassment to those on the Treasury Bench during the winding-up speeches, why have the Government not afforded him the opportunity to come to the House next week to clarify the ambiguities in the current European defence imbroglio?

Mrs. Beckett: First, my right hon. Friend the Secretary of State for Defence was abroad on Government business, and it was, I believe, business that Conservative Members might welcome. I fear that the right hon. Gentleman weakens his case by suggesting that it is necessary for my right hon. Friend to come to the House to clarify confusion as no confusion exists on the issue to which he refers, except in the minds of Conservative Members.

Mr. Vernon Coaker: Will my right hon. Friend find time for a debate on the Government's youth policy? There has rightly been much emphasis in the past few weeks on young people and crime, but the youth policy involves so much more than that. Many young people in my constituency in Nottingham are concerned about the provision of recreation and leisure facilities, and we have heard today about the impact of the minimum wage on young people. Young people want to be involved in decision making. This is a huge subject, and we should talk not just about young people and crime but about the range of services that the Government offer young people in general.

Mrs. Beckett: My hon. Friend is entirely right. I know that he has done much campaigning on the issue locally in his constituency. Although he raises some important issues, I fear that I cannot undertake to find time for a debate on the Floor of the House, where time is always very short, as he knows. That is precisely the reason why the Government—together with the right hon. Member for East Devon (Sir P. Emery)—proposed, through the Modernisation Committee, to hold debates in Westminster Hall to air the many worthwhile issues for which we cannot find time on the Floor of the House.

Sir Sydney Chapman: I am sure that the Leader of the House will be aware of yesterday's High Court decision, which means that the involvement of the Secretary of State for the Environment, Transport and the Regions in determining town and country planning appeals was incompatible with the Human Rights Act 1998. As that will have a profound effect on planning and development control, and indeed may extend to other legislation across the Departments of State, will she arrange for the Deputy Prime Minister to make a statement as early as possible next week to explain his intentions in that regard?

Mrs. Beckett: I will certainly pass on the hon. Gentleman's remarks to my right hon. Friend, but I suspect that the Department will want some time to consider the implications of that decision. Environment questions will take place relatively soon after the Christmas recess, and perhaps that will provide a better time than the next few days to discuss the matter.

Mr. Michael Clapham: May I tell my right hon. Friend that the Union


of Construction, Allied Trades and Technicians, which represents people working in the construction industry, is extremely concerned about the health and safety crisis in that industry? Since 27 November, there have been six fatalities, including that a 16-year-old new worker who was crushed to death on a site. She will be aware that the Queen's Speech includes a proposal for a health and safety Bill, but as it will embrace rail safety, it cannot proceed until the Cullen report is available and has been digested. Will she therefore ask the Deputy Prime Minister whether he would be prepared to hive off the matter and proceed with a health and safety Bill to revitalise construction safety, which would introduce higher fines and the crime of corporate manslaughter in cases where a breach of legislation caused death? Then, at a later stage, when we proceed with rail safety legislation, we could consolidate that measure in a safety Act.

Mrs. Beckett: My hon. Friend makes an important point. The House is aware that the construction industry has long had some safety problems. I will draw his remarks to the attention of my relevant right hon. Friend. I am not sure that it would be possible to separate the issues in the way he suggests, but, as he said, the Government have proposals for a draft Bill on safety, timed to take account of the Cullen report, but I hope that work will be done on other aspects before that report is available. Although I cannot offer my hon. Friend the reassurance that the legislation can be separated as he suggests, he might look for other opportunities, perhaps in Westminster Hall, to focus attention on such issues and to inform the work on other aspects of safety.

Mr. Jeffrey Donaldson: Will the Leader of the House make time at an early opportunity for us to debate the growing threat from dissident republican groups? Is she aware that Joe Fee—a man briefly detained in the Republic after the seizure of weapons in Croatia, destined for the Real IRA—was sent in 1997, as an Irish Government employee, to be an aid worker in the former Yugoslavia, alongside the charity Refugee Trust?
Given that the BBC's "Spotlight" programme is shortly to broadcast a film about the origin of those weapons, is the right hon. Lady aware that Fee's employment in the Balkans occurred some 10 years after Garda intelligence had identified him as the leader of the Continuity IRA? Is she also aware that Joe Fee has been identified by police as the vital point of contact between the leader of the Croat smugglers Ante Cubelic and the Real IRA? Will she provide time for a debate on those important issues?

Mrs. Beckett: I fear that I cannot offer the hon. Gentleman time for an early debate, although he has raised issues of considerable concern that I know will greatly interest my right hon. Friend the Secretary of State for Northern Ireland. He will note, however, that as a result of cross-party agreement Northern Ireland questions will now take place next week, and he may have an opportunity to raise the matter again then.

Mr. Tony McWalter: Will my right hon. Friend find time in the near future for a debate on the relationship between the Government and the voluntary sector? As my hon. Friend the Member

for Gedling (Mr. Coaker) suggested, it is a complex relationship, involving support for both social and youth services at different times. Will my right hon. Friend bear in mind particularly the threat of a £10 penalty for the carrying out of police searches in England, but not in France, Northern Ireland and Wales?

Mrs. Beckett: I think the whole House agrees that the voluntary sector is very important, and the Government have done a great deal to try to develop and strengthen their relationship with it.
I know that much concern has been expressed for some time about the issue of searches, and my right hon. Friend the Home Secretary has given it considerable thought. I fear I cannot find time for a special debate on the Floor of the House, given that the matter has already been aired extensively, but my hon. Friend may wish to seek an opportunity to raise it in Westminster Hall.

Mr. Michael Fabricant: Can the right hon. Lady find time for an urgent debate on the Government's management of crises? Does she recall that, during the summer, the Prime Minister intervened to try to sort out the fuel crisis, and that after a summit at Downing street he announced that fuel would be returned to the petrol pumps within 24 hours? It was not.
Is the right hon. Lady aware that three weeks ago the Prime Minister called another summit, this time to sort out rail timetables? He said that they would be sorted out by Christmas. Christmas is just 12 or 13 days away, and the timetables are still in chaos. British Rail, Railtrack, trains—all are in chaos. Will the right hon. Lady find time for a debate, so that we can discuss why this Government are so incapable and irresponsible in their management of crises?

Mr. Ronnie Campbell: Who privatised the railways?

Mrs. Beckett: I recall very well what my right hon. Friend the Prime Minister said on the occasion of the increase in oil prices internationally, and the problems that it caused here. He said he had been informed that fuel would be flowing again in 24 hours, and he clearly had been so informed, by oil companies and others; but, as the hon. Gentleman says, the undertaking was not followed through. Ultimately, however, the matter was resolved.
As for the problems in the rail industry, I share the incredulity of my hon. Friend the Member for Blyth Valley (Mr. Campbell) that any Conservative Government has the gall to go on raising them.

Shona McIsaac: May we have a debate on the role of the Opposition in a healthy democracy, especially in relation to the millions of pounds of taxpayers' money given to the Leader of the Opposition, supposedly to develop policy? It seems to be being spent on U-turns, about-turns, financial black holes and a plethora of jokes which, by my reckoning, are costing the taxpayer at least a grand a time. May we have a debate on that misuse of public money?

Mrs. Beckett: I understand my hon. Friend's concern. I fully supported the move to increase and, in fact, treble the public money available to the Opposition. I believe that that was the right thing to do. I share my hon. Friend's regret


that more effective use is not being made of that money, and I notice that the Conservative party does not seem to think that it should have to answer the types of questions that it asked the Labour party in opposition. That is an error into which the Tories have fallen. However, I fear that I cannot find time, tempting and amusing as it would be, to debate the role of the Opposition. My hon. Friend might try to find another occasion on which to raise such matters, but I am afraid that I cannot help her today.

Mr. Stephen Day: First, Mr. Speaker, I thank you for granting me an Adjournment debate a few weeks ago on the subject of residents at Chester's Croft, Cheadle Hulme in my constituency, who live in homes classified as mobile homes. During that debate, the Under-Secretary of State for the Environment, Transport and the Regions, the hon. Member for Streatham (Mr. Hill), announced that regulations granting those residents the right to claim compensation as mobile home owners living adjacent to a new road will be laid before Parliament, after a nine-year wait. However, I have discovered from a letter that I received from Stockport council legal services department—it emanated from the Minister—that, once laid, those regulations were withdrawn and altered. Effectively, that means that promises made to my constituents nine years ago will not necessarily be honoured, as they have been for residents living in permanent homes. Will the Minister come to the House to explain why promises made to my constituents are apparently at risk of being broken?

Mrs. Beckett: I am afraid that I am not familiar with all the detail of the regulations to which the hon. Gentleman refers, although of course I understand his concern on behalf of his constituents. On the basis of his figures, I judge that he received a faster response to that concern from this Government than from the previous Government, whom he supported—but there we go. Nevertheless, I shall draw his concerns to the attention of my hon. Friend the Under-Secretary of State for the Environment, Transport and the Regions. It is not clear to me that it will be thought appropriate to make a further statement on the regulations, but I shall draw his remarks to the attention of my hon. Friend the Minister, in the hope that he will be able to clarify the position for the hon. Gentleman.

Mr. Harry Barnes: Could we have a debate on cases of serious job loss? Coats Viyella, in the east midlands, is one such case. A statement on Vauxhall, in Luton, was made yesterday. We need further debate on that matter. At Biwater, in Clay Cross, which is in my constituency, 700 jobs have been or will be lost.
We need to consider the Government's response to the situation. The rapid response unit does not always work perfectly, and regional selective assistance needs to be discussed, as does the question of who receives local government funding and lottery grants and the availability of objective 1 and 2 funding. All those are serious issues in my constituency. Although the issues can be discussed by Members with the DTI, the Prime Minister's office and other bodies, is it not also important that they be discussed on the Floor of the House?

Mrs. Beckett: My hon. Friend is right, but those issues are discussed on the Floor of the House. As he will know,

the Queen's Speech economic debate took place only yesterday. As he is also right to say, no organ of human creation operates perfectly, and the rapid response unit is no exception. I know, however, that he will strongly support steps taken by the Government to secure objective 1 and 2 funding, through the rapid response unit and so on, to try to help people through what can be a painful process of change that it is not always possible to resist.
Although I recognise the importance of the issues that my hon. Friend raises, I fear that I cannot, in the short term, find time for such a general economic debate. I know, however, that he is experienced in finding other ways of raising such issues.

Mr. Christopher Gill: Is the Leader of the House aware of the huge administrative burden and the wholly disproportionate cost imposed on small local authorities by the best value regulations? May we have an early debate so that the concerns of councillors in rural areas can be voiced and so that representations can be made on behalf of hard-pressed council tax payers who face wholly unnecessary and totally avoidable increases in their council taxes?

Mrs. Beckett: The hon. Gentleman will know that although there are those, including him and no doubt some of his local authorities, who are unhappy with the procedures of best value, far more authorities were even more unhappy with the regulations which it replaced for compulsory competitive tendering, which were also thought to be much more bureaucratic, costly and ineffective. So whatever reservations there may be—and I have already said that no system is perfect—best value is definitely better than the system it replaced. I fear that I cannot find time for a special debate on the matter, but I am sure that hon. Gentleman will find opportunities to raise it in Environment questions and elsewhere.

Gillian Merron: May I draw my right hon. Friend's attention to the worrying case of Russell Griffiths, the lecturer acquitted of raping an 18-year-old student in Lincoln, but jailed for lying about his criminal past to get a lecturer's job in Lincoln? His convictions relating to ex-girlfriends included threats to kill, criminal damage and sending obscene material. Will my right hon. Friend find parliamentary time to debate measures which would ensure that employers such as universities would have access to criminal records when making appointments to posts such as that of lecturer, which is clearly a position of trust, as there is clearly insufficient legislative provision at present?

Mrs. Beckett: My hon. Friend makes an important point about a serious case which I know has aroused great concern in her constituency. Although it is an important issue which no doubt will merit further serious consideration, I cannot undertake to find time for a special debate on the matter. Although, like others, my hon. Friend may wish to pursue the opportunities of Westminster Hall, it is not impossible that she will find an opportunity to raise the matter under the various pieces of Home Office legislation that are being introduced.

Mr. Edward Leigh: Has the Leader of the House had a chance to see early-day motion 37,


which is in the name of the hon. Member for Heywood and Middleton (Mr. Dobbin) and has been signed by right hon. and hon. Members of all parties?
[That this House notes that when introducing the Human Fertilisation and Embryology Bill at Second Reading, the then Secretary of State for Health, the right honourable Member for Rushcliffe, assured the House that 'all honourable Members would like to prohibit certain activities, which include cloning and other science fiction possibilities. There can be little doubt that infringing such prohibitions should attract severe penalties provided by the Bill' (7th April 1990, Official Report, column 920); notes in that debate the statement by the late Right honourable Sir Bernard Braine, honourable Member for Castle Point that 'apart from cloning, genetic engineering and producing animal hybrids, the scientist will be able to do what he likes under the Bill' (column 934); notes that nowhere throughout the debates was any differentiation made between cloning by cell nuclear transfer and other techniques, or between therapeutic and reproductive cloning; notes nonetheless the claims made by the Under Secretary of State that those matters were fully debated in 1990; invites the Government to cite those sections of the debates on the Bill covering such matters; further calls on the Government to cite that section of the Human Fertilisation and Embryology Act which makes cloning legal by any technique including cell nuclear transfer and for whatever purpose; and calls for the withdrawal of the draft Human Fertilisation and Embryology (Research Purposes) Regulation 2000, until such evidence has been provided and Right honourable and honourable Members have had adequate opportunity to consider these issues of profound ethical importance.]
The motion refers to the Official Report of 2 April 1990 where, at column 920, the then Minister introducing the Human Fertilisation and Embryology Bill referred to
certain activities, which include cloning—
not human cloning—
or other science fiction possibilities;
and added:
There can be little doubt that infringing such prohibitions … should attract the severe penalties provided in the Bill.—[Official Report, 2 April 1990; Vol. 170, c. 920.]
Is the Leader of the House aware that the statutory instrument that we are discussing next week will introduce cloning, as it deals with cell replacement technology which creates a new cloned cell. There could well be a legal challenge on this. The right hon. Lady should be aware that the statutory instrument that will be introduced on Tuesday is ultra vires under the Bill. Certainly, the courts can look at it under Pepper v. Hart. The words of the then Minister, my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke), could well make the statutory instrument ultra vires. Surely that shows that we should have had primary legislation and that the matter is proceeding in a rushed and chaotic way. Will the right hon. Lady think again, and remember that there could well be a legal challenge to what she is doing?

Mrs. Beckett: If the legal challenge that the hon. Gentleman envisages is brought forward—and I remind him that next Tuesday we will be having our third debate on the matter, so the House has had ample opportunities

to debate the issues—it will be a matter for the court and those concerned in the action. However, the court might be well advised to take account of the fact that the Donaldson report has been available since August and right hon. and hon. Members and everybody else have known since August of the Government's announced intention to introduce regulations as recommended by Donaldson rather than primary legislation. If someone wanted to bring a case saying that those regulations would be ultra vires, why did not they get round to it between August and now?

Mr. John Cryer: I refer my right hon. Friend to Question 1 at today's Treasury questions, which asked about trends in United Kingdom productivity. Could we have a debate on productivity? Many Labour Members would like to draw attention to the fact that, although the mining industry's productivity levels went through the roof in the late 1980s, the reward was closures, job losses and the decimation of the industry. Those problems were caused by Conservative Members, not for economic reasons, but because of narrow, craven, political vindictiveness, led by the right hon. Member for Henley (Mr. Heseltine) and a few of the apparatchiks around him. I, for one, would love to have a debate on productivity so that Labour Members can draw attention to that.

Mrs. Beckett: My hon. Friend makes a powerful point about the mining and other industries, where harm and damage sometimes occurs despite productivity improvements. I understand his analysis of why that happened in the mining industry. Productivity is a hugely important economic issue in the UK. We must continue to pursue and address it, even though resentment is caused when people know that they have improved productivity but that problems are still occurring and that jobs are lost, as has recently happened in Luton. Nevertheless, I fear that I cannot find time for the specific debate to which my hon. Friend referred. I am sure, however, that he will find other opportunities to raise these matters in economic and other debates, as well as in Treasury Question Time.

Mr. Bob Russell: Will the right hon. Lady consider further the request for an early debate on volunteers? Such a debate could take place on one of the blank Fridays. Early-day motion 101, which was signed by members of all parties, draws attention to the Scottish Parliament's agreement, only two days ago, to fees for the Criminal Records Bureau not being levied on volunteers in the youth movements.
[That this House welcomes the decision of the Scottish Parliament that criminal record checks for volunteers working with children in Scotland will be free; notes with regret that volunteers in England and Wales will still be required to pay £10 for identical checks to be made with the Criminal Records Bureau in the coining year; and urges the Government to emulate the excellent example of the Scottish Parliament.]
Does the right hon. Lady agree that a decision by the Government not to introduce a tax on volunteers would be a wonderful gesture for the international year of the volunteer, which is next year? Can we have an early debate to discuss that matter?

Mrs. Beckett: I can tell the hon. Gentleman only what I have already told my hon. Friend the Member for Hemel


Hempstead (Mr. McWalter). The Government are aware of the concern expressed by the voluntary sector and the matter has been the subject of full consideration and discussion. It will no doubt continue to be aired. The hon. Gentleman will know that the Government have not yet announced the precise arrangements that will apply to such checks in England and Wales. I shall draw his remarks to the attention of my right hon. Friend the Home Secretary, but the question of how the costs of such tests and checks are to be met is a matter for delicate decision. Such a decision is not as easy to make as it is to call for.

Mr. David Drew: I associate myself with the remarks of the hon. Member for Colchester (Mr. Russell). I am sure that my right hon. Friend is aware that next year marks the 50th anniversary of the Korean war and, in particular, of the battle of Imjin. Much as it is pleasing to see reconciliation after many years between the north and south of the country, is there time for a debate on how to commemorate the Korean war and the role played by the Royal Gloucestershire, Berkshire arid Wiltshire regiment, which was known in those days as the Glorious Gloucesters? Its members have been invited to participate in various ceremonies in Korea, but are not currently allowed to take up that opportunity. Will my right hon. Friend speak to my right hon. Friend the Secretary of State for Defence to see how the matter can be taken forward?

Mrs. Beckett: I have taken on board my hon. Friend's remarks about volunteers and I understand the pride that he and his constituents properly take in the record of those who served in our armed forces during a difficult conflict. I shall certainly draw his remarks to the attention of my right hon. Friend the Secretary of State for Defence, but I fear that I cannot find time for any other opportunity to discuss the matter. He will be aware that the Armed Forces Bill was introduced on 11 December; he may find an opportunity to raise the issue during debates on that Bill.

Mr. Eric Forth: Can we please have a focused, and possibly brief, debate to clarify how many of our vetoes have been given up by the Prime Minister in exchange for qualified majority votes? The Prime Minister, with his slender grasp of reality and his ignorance of his briefs, made great play of the fact that the only matter that he thought of any importance to have been given up to qualified majority voting was something to do with the pensions of members of the Court of Auditors, which he found very amusing.
A debate on the matter would allow us to flush out, if the Prime Minister were here and if he had read his brief, whether qualified majority voting now applied, for example, to the appointment of the European Commission President or of members of the Court of Auditors, to the rules of procedure of the European Court of Justice, to the rules for structural funds and the cohesion fund, and to Community financial assistance to the member states. These matters should be clarified for the House. The Prime Minister cannot be allowed to get away with his rather trite dealing with a matter which, in the end, is going to be one of huge national importance.

Mrs. Beckett: We had a debate before the Nice summit, and a statement was made to the House after it.
Despite the right hon. Gentleman's uncharacteristically ungracious remarks, the Prime Minister is totally in command of these matters, as the House well understood when my right hon. Friend made the Nice statement on Monday. My right hon. Friend also mentioned some of the other issues to which the right hon. Gentleman referred. However, if I may respond in kind, I cannot find time for a further, special debate on the matter. Furthermore, if the right hon. Gentleman proposed to take part in such a debate, it would be unlikely to be brief.

Mr. David Taylor: The quality of life in hundreds of communities throughout the country is adversely affected by the operations of nearby airports—for example, by night noise, air pollution and land take. Those communities will have noted with interest the publication this week of the Government's consultation document "The Future of Aviation". They will, however, be puzzled by its timing, in that it has arrived too late to influence the terminal 5 inquiry at Heathrow, but too early to reflect its conclusions.
Can the Leader of the House find time, before the end of this Parliament, for a detailed debate on aviation and airports policy, so that communities whose lives are so seriously affected can look forward to the prospect of a more level runway, in terms of their dealings with the powerful aviation industry lobby?

Mrs. Beckett: I thought that runways were mostly level. I understand my hon. Friend's concerns entirely. For most of us who live in the area, the East Midlands airport is both convenient and successful, but I understand that many of his constituents feel the consequences of that. I understand his desire for a debate on the matter, although he lost me slightly when he referred to the Heathrow fifth terminal inquiry, which seems to have been going on interminably. The idea that we might have to discuss that issue further fills me with horror.
I cannot undertake to find time for the special debate that my hon. Friend seeks, but I shall certainly draw his remarks to the attention of my right hon. and hon. Friends, with regard to the timing of the consultation document. My hon. Friend might like to raise the specific circumstances of his constituency in Westminster Hall.

Mr. Graham Brady: A fortnight ago, at Prime Minister's questions, the Prime Minister gave me an uncharacteristically straightforward response, when he gave a clear guarantee that the Government would veto European Union moves to include worker representation in company management structures. Given that the French Government now intend to introduce such a measure next week for discussion by the Council of Ministers, and that there is considerable speculation that the Government have now changed their position, can the Prime Minister be brought to the House to make a statement as to why he is to renege on that promise?

Mrs. Beckett: Of course the French Government will continue to pursue the matter, because that is a change that they wish to make. However, I can set the hon. Gentleman's mind at rest. The Government have no intention of changing their position, and, in consequence, there is nothing for the Prime Minister to report.

Miss Anne McIntosh: I am sure that the whole House joins me in wishing the Leader of the


House a very happy Christmas and a very happy and prosperous—if not too successful—new year. May I ask her to reconsider the request from my hon. Friend the Member for Chipping Barnet (Sir S. Chapman) for a full debate in Government time on the implications of the court decision this week, ruling that the Deputy Prime Minister cannot be both judge and jury—both policy maker and decision taker—in planning matters? I am sure that the right hon. Lady must agree that the issues and implications raised by this go beyond anything that could possibly be considered in Environment questions. Will she acquiesce to our request for an early debate on this, if for no other reason than to convince the House that her beleaguered colleague, the Deputy Prime Minister, is in control of his Department, which is probably far too big?

Mrs. Beckett: I thank the hon. Lady for her kind remarks and return my good wishes to all right hon. and hon. Members, particularly those who regularly attend these events. I am grateful to her for giving me an opportunity to clarify the answer that I gave to the hon. Member for Chipping Barnet. I did not intend to convey the idea that I was committing the Government either for or against a debate in the fulness of time. I simply identified the fact that this was quite a recent decision and no doubt the Department will wish to consider the matter carefully. It is not clear to me what action may be proposed.
As for my right hon. Friend the Deputy Prime Minister being in charge of his Department, I think that the hon. Lady has chosen an unfortunate example, as surely none of us wishes to see Ministers in charge of the courts in this country.

Dr. Evan Harris: I welcome next week's opportunity to debate and vote on the embryology research regulations, but many seriously ill patients and their carers will find it difficult, given the short notice, to make direct representations to their Members of Parliament, which they regret. However, I urge the right hon. Lady to reject allegations that the matter has not been given full consideration, bearing in mind the fact that the first report came out in December 1998, the Donaldson report was published in August, and the matter has been before the House since 31 October.
Finally, I ask the right hon. Lady to join me in pointing out that the hon. Member for Gainsborough (Mr. Leigh) and his colleagues can hardly call for primary legislation when, on 31 October, they voted against a First Reading calling for primary legislation as one way of getting these important regulations on the statute book.

Mrs. Beckett: I am aware that the hon. Gentleman brought forward a ten-minute Bill on the issue and that it was opposed by those who oppose the regulations. He is right that the matter has been before the House for some time, which is why I do not wholly share his view about short notice. People know that there is a debate this Friday; they are aware that the draft regulations have been

around for some time. It is regrettable if those who might have wished to make further representations find it a little more difficult to do so in the time available. However, this is a warning to us all that when issues are around for a considerable time, it is important for people to address them when it is known that they are in contention and will be decided at some point.
I gently remind the hon. Gentleman, and the Opposition Members who have raised the matter, that when we were first pressed on the Floor of the House as to when the matter would be coming forward, most right hon. and hon. Members anticipated that the order would be introduced and that there would be one debate on it, probably relatively early in the new Session. So in fact more time has elapsed than people might have anticipated, because the Government have allowed more time for discussion and debate.

Mr. Christopher Chope: Yesterday the Under-Secretary of State for Wales told the House:
the bicentenary of the 1801 Act of Union falls next year, and the Government will recognise the significance of that.—[Official Report, 13 December 2000; Vol. 359, c. 621.]
Can the Leader of the House assure us that there will be a statement next week, perhaps by the Minister for Patriotism, telling us how and when the Government will recognise the significance of this very important bicentennial for the United Kingdom?

Mrs. Beckett: I am afraid not.

Mr. John Bercow: May we please have an urgent debate in Government time on the BBC's compliance—or lack of compliance—with its charter obligations on impartiality? Regrettably, that matter was not covered in the exchanges that followed the Secretary of State's statement earlier this week on the communications White Paper. Does the right hon. Lady not agree that in the light of the twin principles that no organisation should be judge in its own cause, and that it is desirable for the BBC and independent broadcasters to play on a broadly level playing field, such a debate would afford an opportunity for the Secretary of State to explain without delay whether the BBC will in future be accountable to Ofcom, and whether Ofcom will be able to judge it in terms of its accountability?

Mrs. Beckett: From what I heard my right hon. Friend the Secretary of State for Culture, Media and Sport say last week when he announced the communications White Paper, my impression was that those are precisely the issues that the Government are considering. The intention is that broadcasters will have proper duties, and that Ofcom will be the supervisor of those duties. I shall certainly draw the hon. Gentleman's question to my right hon. Friend's attention, but I fear that I shall not be able to offer him any debating opportunities other than those that are likely to arise in the context of discussing the communications White Paper and what may flow it—unless he would like to seek a special debate in Westminster Hall, if he thinks that the subject merits one.

Points of Order

Mrs. Angela Browning: On a point of order, Mr. Speaker. May I, through you, ask the Leader of the House whether she will reconsider her response to my request for a debate next week on the appointment of the electoral commissioners? Section 3 of the Political Parties, Elections and Referendums Act 2000 requires an address to the Crown from the Commons for the appointment of commissioners. Does it not therefore seem highly appropriate that the Commons should address the subject?

Mr. Speaker: Does the Leader of the House wish to comment?

Mrs. Beckett: I was almost about to venture into your territory, Mr. Speaker, by wondering whether that was really a point of order. I take the hon. Lady's point, but I fear that, as she will realise if she recalls what next week's business is, it will not be easy for the House to find time for such a debate—nor, indeed, do I immediately perceive the necessity for one. However, I certainly undertake to draw her remarks to the attention of my right hon. Friend.

Mr. Ian Bruce: On a point of order, Mr. Speaker. You will know that the local transport plans were announced at 11.30 am today. That was when you came into the Chamber, so clearly you will not yet have been asked about a statement so that we could discuss the plans with Ministers. I wish to bring to your attention a problem in my constituency. Since 8 o'clock this morning, the Labour prospective parliamentary candidate has been telling people about the local transport plans; surprisingly enough, the news was not leaked to the press as normally happens in such circumstances. While he was announcing that we would get our road scheme, at 11.30 the county council was told only that the scheme had "provisional" acceptance, and no funding has been announced for the next five years, but only for the five years after that.
Obviously there has been spin without substance, but surely it is a serious matter for you, Mr. Speaker, when Members of Parliament are bypassed and misleading information is given out to our constituents by prospective parliamentary candidates of the party in government.

Mr. Speaker: I shall look into the matter and come back to the hon. Gentleman.

Mr. Eric Forth: On a point of order, Mr. Speaker. You will know that yesterday we had the first use of the ludicrous new voting system that the House has to suffer. Can you clarify for us what procedure you have laid down in case there are spoiled ballot papers? Who will be the scrutineer? Who will determine whether a ballot paper is valid? If there is a dimpled or otherwise dubiously marked ballot paper, who will decide what it means—and will there be any method of appeal, because in close votes those ballots could become extremely important? The House would

appreciate your early guidance on this matter, so that as our pencils hover above the appropriate boxes we will all be very careful.

Mr. David Winnick: Further to that point of order, Mr. Speaker.

Mr. Speaker: Order, perhaps I may first answer the right hon. Member for Bromley and Chislehurst (Mr. Forth). The hon. Member for Walsall, North (Mr. Winnick) may not then need to raise a point of order.
The right hon. Member for Bromley and Chislehurst always brings important matters before the House and the Chair. I shall look into this one and make a statement next week.

Mr. Winnick: Further to that point of order, Mr. Speaker. As you look into the matter, can you guarantee that it will be dealt with internally and that under no circumstances will you consider asking anyone from Florida to do the checking?

Mr. Speaker: I give the hon. Gentleman that assurance.

Mr. John Bercow: On a point of order, Mr. Speaker. I seek your guidance on a matter that I have had cause to raise before. For the second time in the past 18 months, the Paymaster General has had to sit through fully 60 minutes of Treasury questions without an opportunity to answer any question herself. I am aware from first-hand knowledge that the Minister is frustrated by that state of affairs, which gives at least an impression to Members and the outside world of deliberate sex discrimination. Can we be assured, therefore, that there will be no repetition of that appalling state of affairs?

Mr. Speaker: I can assure the hon. Gentleman that there is no discrimination on my part. He is a regular attender at Question Time and has heard me say before that we should have brief questions and brief replies. Perhaps then we could get to the Paymaster General.

Mr. Christopher Chope: On a point of order, Mr. Speaker. Yesterday, at the Select Committee on Trade and Industry, when a Minister was questioned about the United Kingdom online annual report, the question arose of the availability of that document in written form. It had not been submitted to the Library in written form, and only a summary and a CD-ROM had been placed there. I understand that a Speaker's ruling already exists that any document ordered by a Minister to be placed in the Library must be in a hard copy, and that it is not possible to lay a document before the House in electronic form only. I should be grateful if you investigated the need to extend that ruling to the proceedings of Select Committees and the documents discussed at them. Yesterday, members of the public who attended the Trade and Industry Committee were unable to gain access to the documents that we were using.

Mr. Speaker: I will look into that matter and the status of the document. I hope that that is helpful.

BILL PRESENTED

TOBACCO ADVERTISING AND PROMOTION

Mr. Secretary Milburn, supported by The Prime Minister, Mr. Secretary Prescott, Mr. Chancellor of the Exchequer, Mr. Secretary Smith, Mr. Secretary Murphy and Yvette Cooper, presented a Bill to control the advertising and promotion of tobacco products; and for connected purposes: And the same was read the First time; and ordered to be read a Second time tomorrow, and to be printed. Explanatory notes to be printed [Bill 6].

Public Accounts

Mr. David Davis: I beg to move,
That this House takes note of the 39th and 41st Reports of the Committee of Public Accounts of Session 1998–99, of the 1st to 9th and 11th to 37th Reports of Session 1999–2000, and of the Treasury Minutes on these Reports (Cm 4576, 4593, 4656, 4695, 4688, 4732, 4758, 4798, 4822, 4863, 4886 and 4901).
Before I get to the substance of the business, and since this will probably be the last public accounts debate before the general election, I want to pay tribute to the man who has probably done more than anyone in living memory to advance the causes of the Public Accounts Committee and accountability to the House of Commons. The profile of the Committee and recognition of the importance of its work are well-established elements of our constitutional process, but the Committee's effectiveness and the respect in which it is held owe much to the robust but balanced approach adopted by my predecessor as Chairman, the right hon. Member for Ashton-under-Lyne (Mr. Sheldon). As the right hon. Gentleman has announced that he intends to retire at the election, this is my last opportunity to pay proper tribute to him.
I hold the right hon. Gentleman in great esteem, admiration and affection. He held the post of Chairman for a record 14 years, and given that it is always held by an Opposition Member, the House will understand that my party has no wish that I should challenge that record. He also played a pivotal role in the creation of the National Audit Office in its current form, which is the most important landmark in improving public accountability since Gladstone established the PAC in 1861. The right hon. Gentleman presided over the publication of 600 reports, every one of them unanimous. Those reports have made a significant contribution to better government and service to the taxpayer. Their implementation has saved the taxpayer many billions of pounds.
Above all, the right hon. Gentleman made the Committee what it is today. There have been numerous highlights. The Committee brought to the public's attention a number of significant cases in which public money had not been spent wisely. They include, most famously, the Pergau dam, Wessex regional health authority and the Welsh development agency.
In 1994, under the right hon. Gentleman's stewardship, the Committee produced its seminal 8th report, "The Proper Conduct of Public Business", which examined the standards of conduct in public life and set out the measures needed to uphold the integrity of public servants and to restore confidence in public service. It was a landmark exercise that I have been keen to emulate, drawing out in specific reports the generic lessons arising from the Committee's work on privatisations, the private finance initiative and information technology.
In recent years, the right hon. Gentleman has continued his interest in the work of the Committee and the National Audit Office as chairman of the Public Accounts Commission, which plays a key role in the accountability process, most notably by setting and protecting the NAO's budget.
The right hon. Gentleman has been an unfailing source of good advice to me. He is a man of unusual wisdom and he will be greatly missed. I know that he cannot be here today, but I nevertheless express thanks and gratitude—I hope, on behalf of the whole House—for all that he has done.
In the past year, the Committee has produced 43 reports on matters as diverse as the "Government on the Web" and "Compensating Victims of Violent Crime". Committee members are diligent and thorough. We have lost some valuable members in recent years, to whom I pay tribute. My hon. Friend the Member for South-West Hertfordshire (Mr. Page) made valuable contributions for 11 years. My hon. Friend the Member for Bexhill and Battle (Mr. Wardle) was a highly effective member for four years, and although the tenure of my right hon. Friend the Member for Skipton and Ripon (Mr. Curry) was brief, it was also distinguished.
In the past year, it has given me great pleasure to welcome to the Committee my hon. Friend the Member for Gainsborough (Mr. Leigh), the hon. Members for Eastwood (Mr. Murphy) and for Edinburgh, South (Mr. Griffiths), and my hon. Friends the Members for West Chelmsford (Mr. Burns) and for Westbury (Mr. Faber), who are recent additions.
In particular, I praise the hard work of and the seamless service provided by Mr. Ken Brown, the Committee Clerk, and his team. We all recognise the pressure that they are under and we are grateful for their help and advice.
The Committee is of course uniquely fortunate in enjoying the services of the National Audit Office under the able and experienced command of Sir John Bourn. The NAO serves Parliament well; indeed, its staff are the unsung heroes of the story that I am about to tell.
The Committee has made a real impact. Between them, the NAO and the PAC have generated substantial savings of some £1.3 billion in the past three years—a sum equivalent to an £8 saving for every £1 spent on running the NAO. In the past 12 months alone, we prompted the bodies that the NAO audits to make more than 2,100 significant changes to their systems. That that work is of practical benefit to the Government is evidenced by the fact that more than 90 per cent. of recommendations that the Committee made last year were accepted.
This has not, however, been a record year in terms of numbers of reports. Like all the Committee's failings, that is the fault of the Chairman. On that point, at least, there is always unanimity. In truth, the passage of the Government Resources and Accounts Bill took up much of the Committee's time, my time, and that of the right hon. Member for Swansea, West (Mr. Williams) and the hon. Member for Newbury (Mr. Rendel). That Bill presented an opportunity to bring up to date the Comptroller and Auditor General's powers of audit and access. To do so is a prerequisite if the NAO is to continue to provide Parliament with a quality service in a changing world with many new forms of public service delivery. The Committee's 4th and 9th reports on the Bill set out the arguments for such reform. Key issues remain unresolved, including the CAG's ability to audit companies set up by public bodies such as the New Millennium Experience Company—the dome company—the auditing of all non-departmental bodies and access to contractors.
In our experience, the existing audit arrangements for such bodies have sometimes shown them to be less than satisfactory and occasionally disastrous. The most obvious example is the quality of auditing in further education, about which the Committee is concerned.
The Bill, now the Government Resources and Accounts Act 2000, also gave the Government and the House the opportunity to look to the future and get a grip on new and independent ways in which to measure performance. Performance measures have a great potential to serve as a lever to improve the delivery of public services and to increase for the public the openness and transparency of the Government's efforts on their behalf. However, those measures need to be independently validated and reported to Parliament if the public is to have confidence in them, and if they are to lever up the standards of public service.
The Government did not grasp those opportunities in the context of the 2000 Act. However, it is fair to say that the Chief Secretary understood our concerns and has set up a review of audit and central Government accountability, which is led by Lord Sharman. I hope that that report will put right that problem.
Our remit is wide and covers many subjects, and I shall dwell on three important threads that run through them. First, there is the Committee's role in initiating improvement in Government; secondly, issues arising from our work on regulation this year; and finally, accountability—a high-profile issue at present.
In prompting improvement in Government, the Committee—perforce, for most of its time—focuses on criticising poor performance, but its purpose in so doing is to draw out the lessons that must be learned. That forward-looking approach is exemplified by our first report this year—on information technology—which drew out lessons learned from 25 previous reports spanning about 10 years.
Our report identified common themes; for example, the need to analyse fully the implications of the introduction of new IT systems for all aspects of the business, and the importance of full senior management involvement in championing the successful development of such systems. The Government responded positively to that report; indeed, I understand that it formed the basis of their White Paper. We hope that they will ensure that the lessons that we identified are implemented throughout Whitehall.
Inevitably, many of our reports highlight cases where matters have not gone well—where a body has failed to deliver value for money or has provided poor service to the public or, in some cases, where there has been a combination of the two. One example is the Committee's examination—in its 29th report this year—of the crisis in the Passport Agency in the summer of 1999. At the peak of the crisis, more than 500,000 people were awaiting passports. Many thousands were forced to queue at passport offices, and many more suffered inconvenience and distress because they were unable to find out about the progress of their application. More than 500 people missed their travel dates. That fiasco represented a deplorable departure from the high standards of service that the public have a right to expect.
The crisis was caused by the Passport Agency's over-optimism about the implementation of a new computerised system for processing passports. Although the agency had transferred the risk associated with design and delivery of the new computer system to its private


sector partners, it retained responsibility for ensuring continuity and quality of service. As a result, the agency incurred additional costs of £12.6 million in an effort to maintain services. Only a fraction of that sum—less than £2.5 million—will be recouped from its supplier.
Another example of poor risk management in contingency planning was covered in our 7th report—on the immigration and nationality directorate's casework programme. In April 1996, the directorate let a contract for a privately financed business change initiative, which depended heavily on new information technology. The contract was part of an integrated strategy to achieve a better approach to immigration control. Delivery of the IT system to support the programme slipped, leading to severe disruption to the directorate's services and a large increase in the backlog of cases. By June 1999, a backlog of 219,000 cases awaited processing and decision at the directorate. The Committee concluded that to combine a complex IT project with a major reorganisation was always likely to be a risky venture, yet the Home Office contingency plan was seriously flawed.
The Committee was rightly critical of those cases, but used them to make constructive recommendations on the need for adequate contingency plans in key public services—including both the need to plan for substantial loss of capacity and how to handle rapid rises in public demand when user delays become known.
A further area where we have used examples of weakness to make positive recommendations is that of poor project management. In our 6th report—on the Arts Council of England's monitoring of capital projects—the Committee examined 15 major capital projects funded with lottery money by the Arts Council, totalling about £325 million. We noted that the overwhelming majority had not gone according to plan; 13 of the 15 were over budget and more than half were late. The Arts Council had already found it necessary to make supplementary grants of more than £20 million on those projects alone.
The Committee was concerned that the Arts Council did not have the necessary financial and project management expertise, and that there was a need to strengthen its business monitoring function. The Committee concluded that earlier action to strengthen the council's grant assessment and financial skills would have helped to reduce cost and time over-runs in most cases.
I am pleased that the Committee's recommendations have been accepted and acted on. The Department for Culture, Media and Sport tells us that project monitoring and risk management were central to the management of lottery awards and that it is confident that the Arts Council's new, three-stage assessment process minimises the risk of project cost and time over-runs. The Committee will expect that reform to produce better performance.
Perhaps I might conclude this look at where projects have gone wrong by mentioning our 34th report, which examined probably the most costly example of maladministration in the history of the country: the state earnings-related pension scheme and the failure to inform the public about reduced pension rights for widows and widowers. That case represents an abject failure in a Department's legal responsibility to provide accurate and complete information to the citizen.
For 10 years from 1986, the Department of Social Security did not publicise adequately a very significant change, which was introduced in 1986, but not due to come into force until 2000, to the arrangements for the inheritance of the state earnings-related pension. Nor did it ensure that staff provided the public with correct information on that change between 1986 and 1999. As a result, many thousands of people are likely to have made decisions about their future provision based on an incorrect understanding of the pensions that will be inherited by their spouses after their own deaths. There was a systematic failure of administration in the Department and the Benefits Agency, which illustrates the need for a fundamental improvement in their attitudes to customer service.
I welcome the Secretary of State's announcement of 28 November, which addressed a major concern, flagged by the Committee, regarding the redress package announced in March 2000. We were concerned that many of those affected would not hear about the redress scheme and might find it difficult to understand. We were also concerned that those who had already retired would not be able to make alternative arrangements. The cost of remedying that debacle is estimated at some £12 billion.
The fact that the debacle was remedied properly is to the credit of the Secretary of State for Social Security, but I am sure that he was greatly reinforced in his arguments with the Treasury by the fact that the two most heavily armed Select Committees—the Public Administration Committee, which has the weapon of the ombudsman, and the Public Accounts Committee, which has the weapon of the National Audit Office—were both determined that the pensioners should be treated properly. That is a good example of Select Committees changing the balance of power in Whitehall in favour of democracy and in favour of the good of the public.
On health, we have produced important reports about improving delivery. Our 42nd report, on hospital-acquired infection, highlighted that growing problem. The best estimates suggest that there are some 300,000 cases each year in England, causing more than 5,000 deaths. The cost to the national health service may be as much as £1 billion a year. Not all cases are preventable, but a lot are. A 15 per cent. reduction would save many lives, and could save the NHS about £150 million a year.
We encouraged the NHS executive to take a much firmer grip on the extent of that problem through a root and branch shift towards prevention. We also urged the collection of robust, up-to-date data to enable it to identify the scale of the problem. It is pleasing that the Government have taken forward so many of our recommendations. For example, they have launched a new strategy to address the growing problem of anti-microbial resistance. That includes the establishment and maintenance of surveillance systems, strengthening infection control practices and processes in hospital and the community and the promotion of a co-ordinated programme of research and development of new techniques to detect, prevent and treat infection. They have also announced further money—£31 million—to clean up NHS hospitals.
Lack of data is a common theme in our NHS reports. Effective information is essential for good management and effective health care and central to NHS modernisation. The Committee has taken evidence from the NHS on the ways in which it might improve in-patient


admission and bed management procedures. The potential gains to the NHS are enormous. In 1998–99, a record number of people in England—about 5.8 million—were admitted to hospital for at least a night. There is already much good practice in the NHS, but many problems remain. In 1998–99, the operations of 56,000 patients were cancelled at the last minute for non-medical reasons. More than 2 million bed days are lost each year due to delays in discharging people who are fit to leave hospital. That is due to poor management and poor collaboration between NHS agencies, social services departments and other agencies. That costs the NHS £1 million a day, wasting scarce resources that the NHS can ill afford.
The Committee has also taken evidence on hip replacements. The National Audit Office found that, in England, the NHS performs more than 30,000 replacements a year at a cost of £140 million. Most patients receiving hip replacements receive an excellent service from the NHS and enjoy an enhanced quality of life after their operation. However, the Comptroller and Auditor General reported that there were significant variations in performance. For example, there are variations in practice between trusts and orthopaedic consultants on a range of issues, such as the purchase of hip prostheses, supervision of surgery, length of patient stay in hospital and follow-up after operations. The Committee believes that the NHS executive should address any inequalities in access to care wherever they arise and should resolve the uncertainties about the clinical effectiveness of the different prostheses used.
A key theme running through the Comptroller and Auditor General's report, which the NHS executive acknowledged in its evidence to the Committee, was again a lack of management information available to NHS trusts and individual consultants. We shall never have cost-effective health care until we solve that problem. Better use of taxpayers' money means more and better health care. That underlines the importance of the steps that the executive is undertaking to improve information and of the successful delivery of the new NHS management and information technology strategy on which the Committee commented in its 13th report.
In July, the Committee produced a ground-breaking 27th report on joined-up working in the criminal justice system. Every year, the criminal courts in England and Wales deal with almost 2 million defendants. The criminal justice process is complex involving several separate organisations, including the police, the Crown Prosecution Service and the courts. Defendants are usually represented by lawyers who are publicly funded from legal aid. Cases may require work by probation officers, the forensic science service, independent experts, professional witnesses, the Prison Service and the prison escort and custody service.
There has been much impetus in recent years for public services to work better together and the criminal justice system is a key area where such a joined-up approach is essential. We recognise that the independence of the various players is fundamental to justice, but that independence is entirely compatible with the various agencies taking joint responsibility for achieving value for money from the substantial public sums that they spend. In short, it is hard to think of an area where it is more important to adopt effective joint working. The old adage, "Justice delayed is justice denied" obviously applies in this case.
However, the Committee found that the criminal justice system is some way from having the information base needed to enable people to work together and to plan and manage the process effectively. That causes endemic delays in the system, which increase costs and undermine public confidence. I am pleased to note that the pilot programmes to expedite criminal cases show that real benefits can be achieved. The wider application of those programmes should be an urgent priority for everyone working in the criminal justice system.
The Committee, as a matter of course, also draws attention to good practice. For example, our 40th report examined National Savings' public-private partnership with Siemens Business Services. In that deal, Siemens—a company that does not always necessarily receive the PAC's plaudits—took over the day-to-day administration of National Savings' products, and that included responsibility for more than 4,000 staff. The remaining 130 staff of National Savings retained responsibility for overall business performance, including the design, management and marketing of products to customers, liaison with Treasury on funding requirements and managing the relationship with Siemens. It is still early days, but we congratulated National Savings on managing the process so well and concluded that the deal offers very good value for the taxpayer.
The Committee's positive response to that innovative project refutes the concern raised in some quarters that accountability to Parliament through the PAC acts as a disincentive to risk taking and innovation. Let me dispel that notion here and now. In my view, innovation is essential for radical improvement in the quality and value of public services. The freedom to innovate must be balanced against responsibility to those providing the funds. In the commercial world senior staff are accountable to their boards and, beyond that, to shareholders. In the public sector, Parliament and the Public Accounts Committee perform that role. The rewards for success are higher in the commercial world, but so are the personal consequences of failure.
My Committee is not against sensible and reasoned risk taking and innovation. We support such moves provided that the risks are managed well and hold out the prospect of a sizeable reward for the taxpayer. We do not criticise projects per se, but are certainly concerned about projects for which the risks were not properly evaluated or were badly managed, and thus led to an unnecessary waste of taxpayers' money. There is a world of difference between the Committee's criticism of public bodies' failure to get a grip, which unfortunately we see all too frequently, and its criticism of their failure to take well thought through risks, which they generally do not do. Too often, Whitehall seems unable to distinguish between risk management and roulette management—the careless gambling of the public's money on ill thought out, weakly managed projects.
Cultural inhibitions provide a much greater barrier to innovation in public service. The civil service culture has long been risk-averse, and the pace of progress made by the public service has been slow. To say that audit scrutiny is a barrier to innovation is a lame excuse, used by those who do not have the vision to see the potential of new approaches or the capacity to manage risk. No one who has appeared before my Committee was able to say that he took a well-judged risk, managed it tightly as


possible, but unfortunately it did not pay off for reasons beyond his control. Should that happen, I would commend, not castigate, such action.
The second theme is regulation. Regulators play a key role in ensuring that the rights of the taxpayer are protected, whether through lower prices, greater choice or improved services. Regulators are the only proxies for pressures of competition in parts of vital industries such as power supply, railways and telecommunications. In competitive markets, regulators have a role in protecting the interests of consumers in society by investigating and acting against abusive practices. Sometimes, the regulator's failure to bring about improvements has been due to shortcomings in the original legislation. In such cases, the regulator should seek to strengthen his powers. In other cases, the legislation has provided the regulator with the appropriate firepower, but he has been slow to act or has not moved with the times.
Let me give four examples: the Office of the Rail Regulator, which is dealt with in our report on ensuring that Railtrack maintains and renews the rail network; the Office of Fair Trading, which is covered in our report on protecting the consumer from unfair trading practices; the Gaming Board, which is the subject of our report on better regulation; and the Office of Gas and Electricity Markets, which is addressed in our report on giving customers a choice after the introduction of competition into the domestic gas market.
In August, we published our 35th report on the Office of the Rail Regulator. It was sadly prescient given the fateful accident at Hatfield in the autumn, because we highlighted the sharp rise in broken rails on the network. In 1998, Railtrack forecast that there would be 450 or fewer broken rails in 1999–2000, but in 1998–99 and 1999–2000 it had more than twice that number—937 and 919. Frankly, that is not good enough. Railtrack made a commercial decision not to replace the track, which last year was in a worse condition than when the railways were privatised. The consequence of delays and inconvenience to the travelling public and for safety are now all too apparent.
Some of the problems can be put down to the inadequate powers made available to the regulator on privatisation in 1996, but at the time of our report the regulator had yet to put in place the right tools—notably, amendments to Railtrack's network licence. We called on the Rail Regulator to take action to ensure that the incidence of broken rails were substantially reduced. We recommended that he should set targets for achieving those improvements within the next two years and apply financial penalties against Railtrack if the targets were not met. I am glad to say that the Government accepted the recommendations but, sadly, the incident at Hatfield occurred before they were implemented.
The situation in that sector is a good example of the need to tailor the powers of the regulator to the circumstances of the industry involved. The risk of fatal injury is low on the railways and that will inevitably influence the actions of rail managers, possibly making them complacent. Accidents are infrequent. They seem to happen in groups about every 10 years, but when they occur, the number of casualties can be very high. The regulatory regime should be designed to shape the industry's behaviour to offset such problems.
Our examination of the Office of Fair Trading found that, although the OFT had been hampered by ineffective legislation, it could still do more within its existing powers to protect consumers from rogue traders. Few consumer credit licences are revoked, even though, in some cases, licensed traders have had serious criminal convictions. It is shocking that the OFT has only once applied to the courts for a contract to be revised under the Unfair Terms in Contracts Regulations 1994. The OFT has consistently failed to take opportunities to show traders that it will not tolerate customers being ripped off: it is a watchdog that rarely comes out of its kennel. A more proactive approach would send a powerful message to rogue traders and restore the public's confidence in the role of the regulator.
The Committee's examination of the introduction of competition into the domestic gas market disclosed that low-income customers who use pre-payment meters were relatively disadvantaged. Furthermore, we were astounded to find that, owing to unscrupulous sales techniques, 100,000 customers were switched to a different supplier without their consent. We were especially concerned about the impact of that on the elderly and other potentially vulnerable groups. As in the railway industry, there was a safety concern—in this case, falling standards in tackling uncontrolled gas escapes. Therefore, while welcoming the benefits resulting from gas competition, we urged the regulator to act to remedy the problems that accompanied it.
Sometimes, regulators have been slow to move with the times and, because of wider socio-economic changes, regimes that were once appropriate become no longer relevant. Our 41st report, "The Gaming Board: Better Regulation", is a case in point. It looked at a body that regulates a substantial industry taking in about £11 billion in stake money—a mainstream industry that is largely free of criminal activity and is becoming increasingly sophisticated with the advent of internet banking and internet gaming.
There is a marked difference between now and the era when the Gaming Board was set up in the late 1960s. One of the board's main aims was to purge gaming of criminal activity and ensure that it was fairly and properly conducted. Then, the board monitored the industry through regular visits by inspectors, many of them retired former policemen. Now, however, there is a high level of compliance in the sector: for example, ownership of many casinos is concentrated in a few limited companies with their own audit, security and compliance departments. Yet, until recently, the board's approach and the frequency of inspections had remained largely unchanged.
The Committee concluded that the board's approach was unfocused and wasteful. We recommended that it should rationalise its regulatory procedures to take greater account of industry developments, such as companies' own compliance procedures, and to assess better the success of its activities through appropriate performance measures. The Committee also considered it important that the board should have the appropriate staff mix to reflect today's environment: more staff with backgrounds in information technology and accountancy and perhaps fewer retired policemen.
We have been able to make important recommendations in the regulatory sector because, in most of the sector, the Comptroller and Auditor General


has full access and audit rights. One area of regulation that represents a yawning gap in those rights is that of public housing. The CAG does not audit the Housing Corporation and has no right of access to registered social landlords, formerly housing associations, despite the fact that they will receive more than £800 million this year, rising to £1.2 billion in 2003. The need for effective scrutiny of the sector was clearly demonstrated recently when my Committee discussed the case of fraud at Focus housing association, which was regulated by the Housing Corporation. It took six months of negotiation before the National Audit Office was allowed access to Focus. Such a position is entirely indefensible when such substantial sums of public money are at stake.
In summary, the regulatory regime exists to protect consumers and society from unscrupulous practices. Regulators can be entrusted by Parliament with acting in the interests of consumers, and they need to respond quickly and forcefully when problems arise or circumstances change. The Committee has been keen to ensure that they do so, as the ultimate defender of consumer interests.
My third and final theme, accountability, is central to the history of the Committee and its effectiveness. It is at the core of the relationship between Parliament and the Executive. There are long-established and robust traditions that serve to balance the ability of Government to govern against the ability of Parliament to protect the interests of the taxpayer.
A key feature of the Committee's success is the notion of personal accountability to Parliament of the senior official within a Department or agency. It is not by accident that most senior officials in a Department or other body also have the title "accounting officer". Indeed, until 1981, accounting officers were personally liable for expenditure improperly charged to accounts. If that were true now, I suspect that one or two of them might have £100 million mortgages.
The current arrangements involve periodic appearances by senior officials before the Committee. Normally, we call the incumbent accounting officer, who accepts responsibilities for the actions of his or her predecessors. In most instances, this works well. Sometimes, however, it may be appropriate for past accounting officers—those who were in post when key decisions were taken—to be brought back before the Committee. For example, when the Committee examined witnesses about the problems of the Passport Agency in the summer of 1999, the evidence of the former chief executive was of particular importance to us as we sought to understand events leading up to and during the crisis. For that reason, we shall continue to call witnesses whom we consider to be most appropriate in the circumstances of each case. It is a power that we shall use responsibly, but it is one that should not be open to question.
A particular feature of the special relationship between accounting officers and Parliament is the need for officers to defend their actions to the Committee. There are a few occasions each year when accounting officers consider that they have been asked to take action that they could not defend to the Committee, on grounds of either propriety or value for money. Clear procedures exist for the accounting officer to request a written direction from his or her Minister to take such action. These directions are automatically notified to the Comptroller and Auditor General, who considers the issues and advises the

Committee as he thinks fit. Automatic notification where directions were sought on the ground of value for money was a further innovation of my predecessor, as Chairman of the Committee. It was introduced following the then Committee's examination of the Pergau dam case in 1994.
Our recent investigation into the millennium dome is a classic example of the importance of accounting officers using the automatic notification process. Twice, the accounting officer of the Millennium Commission sought and received directions from the chairman of the commission to make additional grants to the New Millennium Experience Company. The process ensured that the procedure was brought to the attention of Parliament, and the CAG launched an investigation. Knowledge of the directions assisted our understanding of the matter when we took evidence on the CAG's report. We have not yet concluded our deliberations on the issue.
Openness between Parliament and the Executive is a further essential—

Mr. David Rendel: As the right hon. Gentleman is talking about letters of direction, has he considered what should happen when the CAG has reported to him about letters of direction that have been notified to him, the CAG? Given the Public Accounts Committee's role in holding the Government to account to Parliament, would it not be appropriate for all such letters immediately to be placed in the Library so that they are available to all Members?

Mr. Davis: I have a great deal of sympathy with that point of view. The hon. Gentleman will remember that when the first letter of direction was brought to the Committee's attention, I asked the Committee to authorise exactly that procedure, but I am not entirely certain that it would be appropriate in every circumstance. Perhaps the right approach would be to make that procedure the norm but not to make it always the case because occasionally there may be occurrences when a degree of Government confidentiality should be respected. In most circumstances, it would be a good innovation in itself.
I shall continue on that note. Openness between Parliament and the Executive is a further essential ingredient of effective accountability. I have been especially disappointed at the deplorable failure to keep Parliament informed of the financial position at the millennium dome. In that instance, the accounting officer of the Department for Culture, Media and Sport provided the board members of NMEC, a quango established as a company with full obligations under company law, with an indemnity, the value of which could have run into hundreds of millions of pounds.
The accounting officer was advised by the Treasury that there was no need to draw the indemnity specifically to the attention of Parliament as it deemed it to be covered by a general indemnity for all board members of all quangos that had been notified to Parliament in 1998. As a consequence of that advice, the Executive committed potentially hundreds of millions of pounds of taxpayers' money, for such costs could not have been met from lottery money without any specific authority from Parliament to do that. That is wrong, and following representations from the Committee, the guidance on when Parliament should be notified of such commitments will be revised. However, it does illustrate the scant regard for the interests of Parliament that is found in some parts of Whitehall.
A further vital tenet of accountability is the conventions that govern the way in which Ministers should respond to the reports of the National Audit Office and Select Committees. Long-established conventions require the Government to consider carefully Committee reports and to provide a formal response to the House when they have had an opportunity to study the conclusions in detail. Immediate comment should be confined to clarification or explanation of the reports, not to snap responses.
The current conventions were reaffirmed in 1990 in the correspondence between the then Lord President of the Council—Geoffrey, now Lord, Howe—and the then Chairman of the Liaison Committee, Terence Higgins. The basic principle of the guidance given was the need for Departments to avoid pre-empting or prejudging the Government's final and considered reply to recommendations from Select Committees and the Public Accounts Committee, which must first be given to the House. However, in recent weeks we have seen Ministers rush to judgment, either misrepresenting the Committee's findings or taking issue with agreed facts. Recently, our estimate of deaths from hospital-acquired infections has been disputed, despite the fact that the Department's accounting officer had already agreed the figure with the National Audit Office.
A similar incident occurred following publication of our recent 45th report on the acceptance into service of the Chinook mark 2 helicopter and the crash of one of those helicopters on the Mull of Kintyre, when Defence Ministers reacted hastily and negatively. That report formed part of our wider study of the MOD's acceptance of equipment off-contract and into service, which formed the 44th report, and both reports were issued simultaneously.

Mrs. Ray Michie: May I say how much my constituents and I welcomed the 45th report, as the Chinook crashed on the Mull of Kintyre? Does the right hon. Gentleman agree that the MOD could set aside the verdict of gross negligence on the part of the two pilots? The MOD need not admit that it was wrong, but new rules now cover boards of inquiry and it should lay the matter to rest and get rid of the very unfair and unjust verdict, which the report highlighted.

Mr. Davis: I hope that the hon. Lady will forgive me if I return to her question in about 30 seconds, when I have finished the thrust of my current argument.
The Committee deliberated long and hard on the Chinook incident and amassed a significant body of evidence, mostly from the MOD, to support the conclusions that we reached. We aimed not to establish the truth of what happened—which is unknowable—but to point to the severe weaknesses in the processes by which the MOD accepted those helicopters into service and the subsequent procedures by which they concluded that the fault for the crash lay with the pilots. The immediate public response from Ministers was a discourtesy to the Committee, prejudices the Government's considered response and, in my view, flies in the face of the agreed convention.
On the hon. Lady's specific point, we do not seek to lay blame anywhere. It is perfectly possible for the Government to set aside the verdict. Ministers then in the

Department accepted that as the right route, and other experts—whether those involved in the fatal accident inquiry or in aeronautics generally—all think that the verdict is unsafe. None of us seeks to score points; we want a matter of honour to be put right and the system corrected for the future. So I agree with what the hon. Lady has said.
One Minister even suggested that the PAC was acting beyond its remit. I have three responses to that suggestion. First, it is for the House of Commons and the Committee to decide our remit, not for Ministers. Ministers are accountable to Parliament, not the other way round. Secondly, the investigation arose from a study of the badly managed introduction into service of the £140 million upgrade that created the mark 2 Chinook. After six years in development and three years in production, that helicopter was still having erratic engine-control software problems during flight testing. As a consequence, its operational capacity was restricted for more than four years after the Mull of Kintyre crash.
Similarly, the Committee concluded that the accident investigation procedure was flawed, and therefore could not guarantee to deliver the lessons necessary to enhance future safety and performance. Those matters clearly all come within the Committee's remit. Finally, in the midst of that assessment of performance, the Committee was faced with what we unanimously thought to be a serious risk of an injustice. In my view, not only is it the right of any parliamentary Committee to bring injustice to the public's attention; it is the duty of any parliamentarian to do so.
I am afraid that some of these trends suggest, in some quarters, a disregard for the rights and responsibilities in Parliament in regard to the process of accountability. The Government have no reason to fear that process, as is demonstrated by careful consideration of the Committee's work over the past 12 months. That and, I hope, what I have said over the last half hour show how valuable we are.
In many instances, we have provided a "tool kit" for improvement that will enable the Government to get better value for each pound that is spent. It is the accountability process that allows us to do that. The pillars of the process—control of the Chairman's rights to examine the report, and the Committee's right to take evidence from officials—are well cast. Most important of all is the concentration on the implementation of policy, rather than its merits. That allows us to rise above the party political fray, and to focus on the scope for improved delivery of public services.
People enter the House for many reasons. Some come to help the weak, some come to protect the vulnerable, and some come to empower the powerless. I doubt that many come to check the accounts. I hope, however, that what I have said today demonstrates that the PAC, a diligent, hard-working and talented Committee—I refer to its other members, not to myself—seeks to do both. I also hope that it does so to the benefit of the country, the taxpayer and, indeed, the Government.

Mr. Alan Williams: First, let me apologise for the fact that I shall probably croak my way through my speech. The Whips seem to wait until I am seen walking around with a packet of tissues before arranging this annual debate.
I congratulate you, Mr. Deputy Speaker, on your good fortune in chairing the most eagerly awaited debate of the year—a debate of such weight and importance that the press literally cannot wait for it to happen.

Mr. Deputy Speaker (Sir Alan Haselhurst): It is one of those pre-Christmas treats to which one looks forward.

Mr. Williams: It makes even Christmas pudding seem tolerable, does it not?
I thank the right hon. Member for Haltemprice and Howden (Mr. Davis) for his kind comments about his predecessor, my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon). My right hon. Friend entered the House on the same day as me in 1964, and has served it since with great eminence. He was one of the longest-serving Public Accounts Committee Chairmen. He has chaired the Public Accounts Commission and now chairs both the Standards and Privileges Committee and the Liaison Committee.
My right hon. Friend has asked me to apologise for his absence. I know he has already apologised to the right hon. Member for Haltemprice and Howden. He was unable to cancel existing engagements because—as inevitably often happens—we were told of the debate at very short notice.
I join the right hon. Member for Haltemprice and Howden in expressing gratitude to our Clerk, who is something of a parliamentary character himself. His advice is always blunt, clear and sound, and we are lucky to have him.
No one doubts that all the other Select Committees envy us the National Audit Office. That is not surprising, given their impoverishment in terms of support for their work in shadowing Departments; but as other Members have recognised over the years, it is not just a matter of envy. There is no way that a Public Accounts Committee, meeting a limited number of times a year and consisting of members who are effectively part-timers in terms of monitoring—after all, we must all do our constituency work and our other parliamentary work—could monitor expenditure properly, and provide the accountability that Parliament needs, without the NAO.
I also congratulate the Chairman of the Committee on his willingness to embrace change and experimentation, which does not always make one friends. The Committee needs to consider its position because, with an average 50 hearings a year, it is the bottleneck in the scrutiny process. I have put my views on that on the record in many previous debates, and I know that my colleagues pore over those comments regularly as bedtime reading.
In relation to the right hon. Gentleman's willingness to experiment, the Public Accounts Committee tries—we have done so once or twice before, but now do so more regularly—to overcome the continual frustration of holding hearings without the witnesses who were in office at the time that the events occurred. Early retirement seems to be as popular among some accounting officers as it is in the police force. On one occasion, we called back one chairman—who was by then an ex-chairman—for a hearing in May. I asked him when he had first heard the date for the Public Accounts Committee hearing, to which he replied, "Two weeks before Christmas." I then asked him when he had handed in his resignation, to which he replied, "One week before Christmas." That is the problem we have faced.
The right hon. Gentleman or my hon. Friend the Minister may be able to recollect—I cannot for the moment—the identity of one of the ex-accounting officers whom we called back for what appeared to be a very critical hearing. He was very helpful because of his personal perspective on explaining the events surrounding the particular decision-making process, and that changed our perception of what had happened. Although the NAO report was adverse and we had to be critical, our report was substantially less critical because the witness was so clear and helpful, and we congratulated him on his evidence to the Committee. Although it is a cause of discomfort to them, the recalling of accounting officers is essential if we are to establish what happened when things went wrong, if they went wrong. We do not blame when there is no blame. However, if there is blame, it must be discovered and attributed.
The right hon. Gentleman referred to maladministration in the state earnings-related pension scheme, which was a sad case dating back to 1986. In that respect, I congratulate Treasury and other departmental Ministers because although the failing was not of their making, they devoted a massive sum to try to redress the injustice that has been done or could have been done to many people.

Mr. Jim Cousins: I want to raise the issue of the recall of accounting officers, which struck me as important when it was mentioned by the right hon. Member for Haltemprice and Howden (Mr. Davis). My right hon. Friend will of course realise that the tradition of Select Committees is that one does not bypass the current officers and go to their predecessors, even to deal with a historic matter in a Department. It is, therefore, an interesting innovation. Will my right hon. Friend take that point on board and consider whether scrutiny in Select Committees and in Parliament more generally might go beyond the current officers and lead to the recalling of former departmental officers who are now retired to give an account of their behaviour? I am referring not just to people who have accounting officer responsibilities, but speaking more generally.

Mr. Williams: I am grateful to my hon. Friend for that intervention. In so far as it is a tradition, it is a silly one that is best disposed of. Those who most support it tend to be the permanent secretaries who sometimes encourage their Ministers to intervene. We have had Ministers write to us objecting to the fact that former accounting officers may be called before the Public Accounts Committee and we regard that as extreme impudence. We decide who the relevant witnesses are. I hope that all Select Committees will consider whether the current incumbent is the most appropriate witness to enable them to fulfil their obligations to the House. If Select Committees do not fulfil their obligations to the House, the House will be incapable of carrying out proper scrutiny of the Executive.
May I echo what the Chairman of the Committee said in relation to the Chinook crash? What impressed the Committee unanimously was the fact that pilot error has to be proved without any doubt whatever. We could see nothing in the evidence that was put before us to prove that the pilots were responsible. On the basis of the evidence that we had, they were blamed because no one was willing to admit that anything else could have caused the incident.
One of the flaws in the inquiry system within the armed services is that the final decision about the cause of something going wrong, such as the tragedy involving the Chinook, passes to someone who inevitably has a conflict of interest. It passes to the person who is responsible for keeping his military assets serviceable and available. Therefore there must be a strong temptation to give the benefit of the doubt to the equipment rather than the people manning it. We all felt that the case had not been proved against the officers concerned.
May I now concentrate on just one issue? Before anyone gets too optimistic, let me say that I can speak at great length on single issues when so driven, so I do not want to build up too many hopes, nor a premature appetite. I should like to discuss the private finance initiative. We have considered numerous reports dealing with PH projects over the past couple of years and I should like to review and put before the Minister in a way that I hope is constructively critical—where it is critical—some of the lessons that need to be learned, as the PFI will clearly be a major part of Government practice in future.
Let me make it quite clear that I have no personal opposition to the concept of applying a mortgage to national assets. Although there may be one or two exceptions, would most of own our houses today if we had not been able to buy them through a mortgage? How many of us would be in a house that we could say was ours if we had to wait until we had enough money to buy it outright? It is the same with cars, but I do not see any problem; most taxpayers and most of my constituents would prefer 20 hospitals to be up and running in the next two years than to have to wait for them to come one after another over 20 years, even if we have to pay a mortgage premium.
I do not, therefore, start from a position of opposition. Ministers seem unable to grasp the fact that I do not oppose the passing of risk. Indeed, as a member of the Public Accounts Committee, I can say that no one could be more in favour than I am of passing risk from the public to the private. Again, there is a personal, domestic parallel. Why do we all take out insurance on our houses? We pay a premium against a risk that could be too big if we were unfortunate enough to be struck by it, as has happened recently because of the floods.
I see nothing wrong with passing risk by paying a premium for it to be borne by someone else. That is highly desirable—indeed, it is doubly desirable in respect of high-tech projects that are at the frontier of technology. Over the years, the Public Accounts Committee has seen time and again that Departments get it wrong. Often, they point out why problems arose and provide understandable reasons, but the same risks and errors are nevertheless repeated. In areas of high technology especially, there is enormous benefit to the taxpayer in trying to pass the risk across and I have no objection to that. Where the objection lies is not a PAC issue, but one of political opposition both within and outside the House from people who are concerned about the privatisation of work forces and the effects on conditions of employment and so on.
I should like to consider several problems. As I said, I am in favour of passing risk, but it has become clear during the PAC hearings that we all too often pay the premium without the risk moving. The average PFI rate

of return is 16 per cent. It can vary considerably, as I shall go on to explain, but it is usually between 15 and 17 per cent. and we have been told on several occasions that 16 per cent. is the average. One of the witnesses at a recent PAC hearing spoke about assessing the required rate of return and about making it 50 per cent. higher than would usually be expected on a normal contract. The evidence was given by an excellent witness from the private sector, with regard to the Fazakerley prison unit.
The Committee criticised what happened in the Passport Agency, not because we were opposed to the PFI but because the witnesses told us that the Department had incurred about £12.5 million of the cost. We then asked how much of that cost was borne by Siemens. The answer was £2.5 million. The passing of risk was not successful if the taxpayer picked up £4 out of £5 on all the damage costs that were created for the Department.
For those who doubt the PAC, let me point out that its value was further demonstrated by an answer to a subsequent question. I asked when Siemens agreed to pay the £2.5 million, and was told that it did so two weeks previously, shortly before its representatives attended the hearing. One had the feeling that the company paid the money in order to buy peace and quiet, rather than to settle any perceived legal obligation.
There are reasons for that, which I should like to draw to the Financial Secretary's attention. He is probably aware of them, but I should like to get them off my chest. The first reason is sloppy contracts. In some cases, we have found contracts in which only proveable damage imposes any cost on the contractor. In the case of the Passport Agency, most of the cost lies in inconvenience to the public and is not reclaimable. It is essential that it should be, if risk is to be passed.
Siemens is interesting in this respect. It carried out the computer installation for the immigration service, in which a backlog of 165,000 cases built up. The company also installed the Passport Agency computer systems, which led me to chide it because the British could not get out and the foreigners could not get in.
The third Siemens case that came before the Committee, to which the right hon. Member for Haltemprice and Howden referred, was that of National Savings. The contract had 56 performance targets built in, which ensured that, regardless of proveable damage or damage to the Department concerned, failure to meet performance targets that mattered to the public as well as the Department would trigger penalties. That is a lesson that Departments are learning. One understands that there is a learning process involved with innovative contracts, but it is important that the Government ensure that officials are held responsible for allowing any sloppy contracts to be drawn up.
Another reason for not taking action was a fear of legal costs. Some companies might say that they are going to dispute a matter and take it to court. Those companies might have deep purses. Some of the Departments might also have deep purses, but their money is already allocated for use during the year and they could be frightened off by the prospect of the legal costs.
A further reason was a fear that taking legal action could sour the atmosphere for further PFI contracts. Firms in the process of negotiating with the Government over a whole range of potential PFI contracts could be frightened off if they saw one of their predecessors taken to court.


I hope that some of this information will show that, properly approached, the PFI is so akin to Christmas for companies that they should be queueing up to take part in it.
We have identified the problem of risk not transferring, and given some reasons why it does not do so—either contractually or in practice because of a lack of follow-up legal action. A further problem is abnormally high rates of return. If all companies work on the basis we have discussed, an average of 50 per cent. above the normal rate of contract is a very high rate of premium to pay, especially when one considers that PFI contracts worth £17.3 billion are already in place. That was the figure at the time of our hearing—it is higher now.
A newer phenomenon is the missed opportunity that arises from the fact that refinancing of contracts is possible. One of the reports concerns the company that undertook the Dartford and Gravesham hospitals PFI and the Fazakerley prison PFI. It intended the return to be 16 to 17 per cent. It was going for about the average, having originally aimed slightly lower. Then, after a relatively short time, it refinanced. Much of its finance was debt—I am not saying that in any critical sense; that is how business works. As a result of refinancing that debt, it turned the 16 to 17 per cent. rate of return into a 39 per cent. rate of return. I asked the witness, "Are you saying that this means you will get a 100 per cent. pay off in two and a half years?" He said yes, and reiterated in subsequent evidence that he agreed with my proposition.
The 39 per cent. rate of return and a two and a half year payback—on a 25-year contract, incidentally—does not include the profit that had been made on the project's construction fees, nor the profit that the company's partner, Group 4, makes in supplying services to the prison. So there was a 39 per cent. rate of return on a £247 million project, with no clawback facility.
The Department eventually got £1 million—that is all. The company threw the odd million in the Department's direction because—eyes glistening—it was already using its mobilised capital, as was said in evidence by a subsequent witness. The money released after the two and a half years was being used to earn profit again, because it was used to go after more PFI projects.
That is why I say that the PFI offer to tender is like Christmas for companies. They should get in while they can, because people are making an enormous amount of money. I do not mind people making money, but I object to taxpayers not getting their fair share of any unforeseen windfall profits.
I have great respect for the young man who gave evidence—he clearly knew his field very well. However, given that most of the PFI contracts could be subject to refunding and there is almost £17 billion worth of them, we can see how much extra windfall profit companies stand to make if clawback is not built into the contract.
In fairness, knowing that the Department was coming before us, the accounting officer said that he would issue to his officials advice that wherever possible they had to build in a 50:50 clawback agreement on refinancing. We are delighted about that. If people make mistakes and then learn from them, at least taxpayers get some benefit out of it because the first mistake alerts people to opportunities. However, the civil servants in the Department said that they could not anticipate that happening. With respect,

that argument is difficult to sustain when we bear in mind that, surprisingly, a much earlier contract related to the channel tunnel had clawback arrangements.
It was not a question of such arrangements not being known within Government. Indeed, it was particularly worrying that the Department's advisers, Lazards, said that it was none of the Department's business. It said that it was not up to the Department, but to the company and the contractor. After all, that is the reward for risk. There is already a 50 per cent. premium for taking the risk, so we do not have to give out windfall profits on top of the insurance premiums that we are paying. I have a strong suspicion that Lazards' response was such because it realised that if the response had been anything else, Lazards would have been in the firing line for not having spotted the potential when advising the Department. I am angry about the way in which it failed in its obligations to its customer to provide the best quality of advice.
As I said, what is worrying about the PFI, in terms of finance and recycling, is the fact that there are more than £17 billion—the figure will soon be up to £20 billion—worth of PH contracts. Therefore, scope for a massive recycling windfall must exist. I took an unusual step, but it was in search of information: I thought I would try to alert Ministers by tabling to every Department a question about clawback in relation to PFI contracts. I had answers relating to 105 contracts.
I provided all the information to the National Audit Office, which kindly assessed my replies from Ministers. It said that, with the exception of the channel tunnel, which was an early one-off, by value only 29 per cent. of existing PFI contracts were covered by a clawback arrangement. Credit for that goes to two of our most frequent customers and visitors, the national health service executive and the Ministry of Defence. Both of them have learned a lesson and are building it into more of their contracts.
Unfortunately, some Departments have not been so aware of the situation. Last year, the Department of the Environment, Transport and the Regions—strangely, as it contains the Department that was involved in the channel tunnel—entered into three projects that had no clawback facility, including London Underground Connect. The NAO drew up for me a table of large projects of more than £50 million in capital value without clawback refinancing gains. It showed that there were six road contracts worth £1,078 million, four London Underground projects worth £1,009 million, seven PFI hospitals worth £690 million, five defence projects worth £568 million, and information technology partnership contracts—the responsibility of the Department for Education and Employment—worth £116 million. None had clawback facilities. The A5 in Wales, a much needed arterial road, was worth £110 million, and the Berlin embassy—the responsibility of the Foreign Office—was worth £50 million, but there was no clawback facility for either.
I have enormous regard for the Minister, who does a tremendous job; I do not say that to many Ministers or officials. I hope that he will take on board anything new or of positive value that I have said. There probably was nothing new, because his officials probably report diligently to him on what they hear in the Public Accounts Committee, when we are not berating them—a little side-sport when hearing evidence from witnesses seems singularly dull.
May I be slightly wicked, and observe what seems to be a paradox in prudence? It seems interesting that we concentrate on paying off national debt—I am all for that—to save about 8 per cent. interest a year, and at the same time encourage the spending Departments to enter into PFI debt with rates of return of 16 per cent. a year. That seems slightly inconsistent. I feel that I could make a profit if I were in that situation, by adjusting those figures. The Government would make £22 billion from selling air traffic control—I know what I would have done with the money, which I am afraid is why the Government did not receive my support on that.
Having been an Industry Minister and in economic Departments in the 1960s and 1970s, I understand the advantages to Government and the attraction for Ministers of reducing the public sector borrowing requirement and getting public expenditure off the balance sheet. As someone who is pro-European—although I am not queueing to exchange my money for the euro—I am forced to observe that getting public expenditure off the balance sheet would seem to help us meet the criteria to enter the euro. I am sure that has never crossed anyone's mind in the Government at all.
I do not want to rehearse all the points that I made last year, so I shall be brief in talking about parliamentary accountability, a matter lightly touched on by the Public Accounts Committee Chairman. As the Minister knows from our exchanges last year and from the discussions in the Sharman committee, which was set up as a result of them, the PFI is a source of great anger to the Committee and frustration to the National Audit Office. The National Audit Office has been kept out of the monitoring process.
I have concentrated on the PFI today, perhaps over-dramatically, to highlight some of the shortcomings. I hope that I can persuade the Minister that the NAO, like our Chairman and me, has no problem with passing a risk to the private sector, and that the investigations that it has carried out already—limited as they have had to be, owing to limits imposed on it—have enabled us to pinpoint the factors to which I have alluded today. If it had not been for the NAO, I suspect that most Departments would still not be aware of the problems and opportunities that refinancing makes available.
On the occasion of the valedictory visit of the accounting officer for the Ministry of Agriculture, Fisheries and Food, we had a fascinating exchange. The Ministry has been one of the worst Departments in terms of deliberately precluding the National Audit Office from almost every petty little quango that it has ever set up. There have been all manner of fallacious and often unexplained arguments. As the accounting officer was retiring and after he had finished his questioning in relation to the hearing of the day—he had no further need to get on the right side of the Public Accounts Committee—I told him that I knew that the most senior of permanent secretaries and many of his colleagues were dubious about the PAC, and that I had even heard that past Ministers were aware that the Committee was regarded with less than favour in some circles in the Executive. I am not saying which Departments are involved or trying to play politics.
When I put it to the accounting officer that the PAC had been criticised for being an obstacle—both the right hon. Member for Haltemprice and Howden and the hon.

Member for Hertsmere (Mr. Clappison) were present, I think—he said that, on the contrary, the discipline that the PAC and NAO imposed was invaluable. In that case, I asked, why did his Department exclude so many of its silly little quangos from PAC scrutiny. He said that he would have no objection to every quango being subject to PAC inquiry. We have gone 99 per cent. of the way, and all we need is for my hon. Friend the Minister to say that he too sees no reason why every little quango should not be subject to scrutiny by the Public Accounts Committee.

Mr. David Rendel: I rise aware that no one else seems to be seeking to catch your eye, Mr. Deputy Speaker. Perhaps others will, but no one else has risen so far. Given that the two Front-Bench spokesmen will require about half an hour between them, I seem to have until around 6.30 pm to finish my speech. I shall do my best to come to a conclusion a little before then, just in case one or two other Members wish to join the debate.
I am pleased to be able to speak and honoured to follow the right hon. Members for Haltemprice and Howden (Mr. Davis) and for Swansea, West (Mr. Williams). I have worked a great deal with both of them this year on the Government Resources and Accounts Bill and during the Sharman inquiry. I have enjoyed and been interested in my work with them, and one of the great strengths of the Public Accounts Committee is the way that we work across parties to produce unanimous reports. That process has shown its worth over many years, back into the century before last. It continues to do so today.
I was slightly concerned when the right hon. Member for Swansea, West described me near the start of his speech as his hon. Friend. The conventions of the House give that a special meaning, and as the Conservatives are my only serious opponents in my constituency, being called an hon. Friend by a member of the Labour party is a little worrying. I hope that it does not get back to my local press.

Mr. John Bercow: It will.

Mr. Rendel: It might lose me quite a few votes.
I was amused to hear the right hon. Member for Haltemprice and Howden say that he hoped that he would not chair the PAC for quite as long—14 years—as his predecessor did. I, too, hope so, but for a slightly different reason. The Chairman is by long tradition a member of the official Opposition, and I hope that the Conservatives will be the third party long before 14 years are up.
It has been an honour to serve for the past year on the PAC. I joined it comparatively recently, although several of its members joined more recently still. Some of the reports being noted by the House today are on hearings that took place before I joined last November. Like the right hon. Members for Haltemprice and Howden and for Swansea, West, I am grateful to the Clerk for all his help. I have probably been on the phone to him and his staff more than any other member of the Committee this year. I have also been on the phone a lot to the Comptroller and Auditor General and his staff, to whom I am also grateful for their help with particular points and with requests to investigate matters that I felt required it.
Membership of the PAC has provided a fascinating insight into Government operations in general. I wish briefly to mention three of the reports before us. First,


the report on the Highways Agency and how it deals with surplus property was of particular interest because of the property purchased when the Newbury bypass was being built. Clearly, the agency had, in a number of cases, been unable to run, maintain or look after the property well. A certain amount of money had been lost as a result.
One important lesson lay in the reason for some of those losses. It is difficult for the agency to deal with property without knowing how long it will be in the agency's hands. We have seen a whole series of changes to the transport programme over the past few years. First it went up, then it was cut back, then it went up again and then it was cut again. Those changes in the programme, under which money is taken out and put back in, make the Highways Agency's job difficult, particularly when it comes to knowing how long it should hold on to property, and for what purpose, when it has bought it because a scheme has been proposed.
Secondly, the report on vehicle emission testing considers how effective testing is. Since the report's publication, there has been horrendous change to our weather and huge floods, which have brought home to people the dangers of global warming and extra rainfall. The importance of vehicle emissions testing has become clearer even than it was previously. A large part of the noxious fumes and carbon dioxide produced from the various vehicles on our roads comes from cars that run inefficiently and produce more emissions than they should, often because of poor maintenance. Improving our vehicle emissions testing and driving off the roads vehicles that produce huge emissions would benefit the environment, help to reduce the global warming that rightly worries us all, and benefit the whole country and the world.
Thirdly, the report on irregularities in the handling of visa fees in Calcutta displays a clear failure to interview the culprits appropriately, from which the Foreign and Commonwealth Office must learn lessons. In addition, the whole system of applying for and obtaining visas is coming more frequently to the attention of Members because there are such inefficiencies in the system and such a great backlog. We constantly hear of cases of people who have been kept out of this country wrongly, often because the system itself leads to the loss of important and valuable paperwork.
One of my constituents is going back abroad without the relevant documents for returning to this country because her paperwork has been lost by the office concerned. I am happy to say that I have been able to get for her a full confession of guilt by that office, and that should enable my constituent to return to the United Kingdom. The office has written a long letter indicating that it is entirely its fault that the papers have been lost and that no one should try to stop her. Nevertheless, that sort of problem happens often, and the whole visa system—in our consulates and embassies abroad and here at home—needs a great deal of improvement.
I shall discuss three reports at slightly greater length. The first is the 35th report, on the Office of the Rail Regulator, which was mentioned by the Chairman of the PAC. It was published on 23 August—before the recent east coast main line accident at Hatfield and all the problems that that has caused. The National Audit Office report pointed out that, believe it or not, Railtrack was

getting generous bonuses for reducing delays. How ironic that now seems, given what has happened in the past few weeks.
Many rail passengers, including, no doubt, many hon. Members, have suffered intolerable delays. Many of my hon. Friends who represent constituencies in the south-west have found it almost impossible to travel to Westminster. One had to drive the entire way from the far south-west to fulfil his duties in the House. He could not travel by aeroplane because the winds were too strong; he could not travel by rail because the line was down and few trains were running. It took him six and a half hours to drive here and the same again to drive back. That is nonsensical, and it is clear that we must sort out the present problems on the railways as quickly as we can.
Our report, and the NAO report on which it and our hearing were based, pointed to a failure of the entire privatisation process and, as the Chairman noted, a failure of regulation of the railways. During that hearing, we had an interesting discussion on what constitutes a delay in the railway system. The answer may seem obvious to most people, but it is in fact far from obvious.
We discussed whether a passenger who has to get off a train half way through his journey and complete it by bus is in fact delayed. Apparently, if it is known well in advance that it will be necessary to do that, one has not necessarily been delayed, even though the bus must gently travel by road to each station in turn, thereby deviating from the normal direct route and taking much longer. In such circumstances, most passengers would believe that they had been delayed, but as long as advance information is given, such a journey does not count as a delay.
Even where one does not have to get on a bus, as long as advance notice has been published of engineering works on the line—of course, such information may not get through to the passengers concerned—any consequent delay does not count as such.

Mr. Bercow: The hon. Gentleman is not making a narrow point about distinctions between privatisation and nationalisation, so he will accept that, although issues of delay are important, so are those relating to the stated frequency of service. When speaking to the Gracious Speech yesterday evening, his near neighbour, my right hon. Friend the Member for Wokingham (Mr. Redwood), pointed out that—post-privatisation—there used to be a service at 10-minute intervals between Reading and London, but that that promised service no longer exists. I wonder whether the hon. Gentleman is aware of that point, which certainly requires attention, quite apart from the debate on privatisation.

Mr. Rendel: I am grateful to the hon. Gentleman for that intervention, although I was unable to hear his right hon. Friend's comment. I also use that very line and I am aware that the service from Reading to London—indeed, all the way from Newbury to London—has deteriorated in the past few years. Of course, that is partly due to the work to create the new Heathrow link. Nevertheless, I am delighted that the hon. Gentleman supports an improvement in that rail service. I hope that his comments are duly noted by Thames Trains and First Great Western, because we would love a better service on that line.
The third reason why an apparent delay to a passenger may not in practice count as such is changes to the timetable. That is ironic indeed, in view of recent


necessary changes. I have in my hand a special timetable that has been produced for week days in the period 11 to 15 December. In other words, a new timetable has been introduced that covers five days alone. As soon as such a timetable has been agreed with the Rail Regulator and introduced, the trains therein no longer count as delayed provided that they run to that new timetable.
Of course, that new temporary timetable—I hope that it will be temporary—shows all the trains taking much longer than they did a few weeks ago. Again, simply by changing the timetable and ensuring that it is agreed, the train operator—or Railtrack—can overcome the difficulty of being charged with delaying passengers.
The condition of the track is also a big problem. That was highlighted during our discussions at the hearing. At that time, 3 per cent. of the track was considered poor. That is also somewhat ironic given what people are now saying about the need to run trains slowly over many miles of track and to repair and replace several hundred miles of it—and to do so virtually immediately, before trains can be allowed to run rapidly over it again.
However, it was not merely the 3 per cent. of track that was known to be poor that was causing the problems. We were also told at the hearing that there were many breaks in the rest of the track. That shows that the regulator has failed to ensure adequate investment since privatisation and that the Government failed to ensure adequate investment before that time. To be fair, the regulator made it clear to us that his powers were extremely limited in that regard. The powers of the regulator, rather than the regulator himself, may well be at fault.
Another problem was highlighted in the report: that of train operating companies that use inadequately designed or maintained rolling stock that is liable to damage the track. Clearly, that is a failure of privatisation. During the hearing, the Rail Regulator said:
The access contracts which were put in place between Railtrack and the train operating companies at the time of privatisation in 1994–95 were contracts of a very poor quality indeed. They gave very poor quality specification as to the quality of the work that Railtrack needed to do and indeed the quality of work that the train operating companies had to do in order to prevent the trains causing unnecessary damage to the network.
Clearly, there were great difficulties with the privatisation process and they were brought out at the hearing that we held. I hope that the Government will do what they can to put those problems right. As we have seen, the underinvestment is causing real problems for rail travellers.
The second report on which I shall spend time is the 34th, on the state earnings-related pension scheme, SERPS. It is right to concentrate on that report because it is perhaps the most important that the PAC has produced. I will never forget the moment when the Chairman said to me in the Corridor, "I hope you realise that you've just cost the Government £8.5 billion." That does not happen to many Members. He was not being entirely fair to other people in saying that I alone caused the Government to spend an extra £8.5 billion, but I am proud to have played a part in ensuring, first, that the fiasco came to light, and secondly, that something was done about it by asking the NAO to look into and report on the matter, which it duly did. By the time that it reported, I was happy to be a member of the PAC and to be able to take part in the hearing on the report.
Of course, that report examined the Government's original scheme, which was more generous than we had expected—given remarks made at the time by social security spokesmen who have since moved on. The report found that the scheme appeared to be comparatively generous, but that it had certain severe problems, including how people affected by the SERPS fiasco were to be told about the new scheme.
How was that to be done? I and others had suggested that all those concerned should be written to; that seemed only logical, given the fact that the Government had insisted on that course for all those affected by the private pensions fiasco. When we put that suggestion to Ministers and others, they said that it was not possible because they did not have up-to-date addresses for many of the people in question. The matter was raised in the Committee and our report suggested that something should be done; it is not tolerable either that the Government should have large liabilities towards a large number of people of whose whereabouts they are unaware, or that they should rely on those people to get in touch with the Government when they are eligible to claim their pension.
I am delighted that, after the PAC report and the comments of the ombudsman—who was obviously also involved—the Government changed their first response to our complaints on that matter. The PAC and the ombudsman made it clear that they expected to take a long, hard look at the final details of the scheme so as to ensure that it met requirements. Perhaps because of that threat, the Government decided to introduce a more generous scheme; the total—for which some people seem to hold me responsible—rose from £8.5 billion to more than £12 billion. Those are very large sums indeed.
The £12.5 billion cost of the second scheme is almost the same as the original cost—if the Government had moved quickly—of deferring for 14 years the entire reduction in SERPS widows' pensions to 50 per cent. of the original amount, as had been suggested some years ago. That is even more than the Liberal Democrat proposal in an amendment that I was pleased to move to the Welfare Reform and Pensions Bill in spring 1999; we called for deferral for a decade. If the Government had agreed with that proposal, they might have got away with a slightly cheaper scheme. However, I am happy that they found even more money than we proposed, and have chosen a scheme that is, in effect, equivalent to the cost of a 14-year deferral.
It is important to note that that money is not hanging off trees; it is taxpayers' money that is being transferred from one section of society to another—from people who will be in employment during the next 40 or 50 years to those who have already paid their SERPS contributions. The original intention of those contributions should be recognised; it was to store up the right to a pension for the pensioners themselves and for their widows or widowers in future. As those SERPS contributions have been paid, it is correct that the Government have acknowledged the right of the contributors to receive a fair return. The fact that the Government have been forced to implement a more generous scheme than they originally proposed demonstrates clearly the power of the PAC and the ombudsman.
The third PAC report on which I want to focus is the 45th report, although it was not included on the Order Paper. Unusually, the Secretary of State for Defence saw fit to reply in the media to that report—on the sad accident


of the Chinook helicopter crash on the Mull of Kintyre—before the relevant Treasury minute had been issued. I was shocked and appalled that he should choose to broadcast it on the radio as soon as the report came out. That is not how such matters have been arranged in the past, and it has caused him great difficulty. It will be much harder for him to change his mind—as he is bound to do—and give a more considered opinion. I do not think he will be able to maintain that on-the-spot view.
The Secretary of State described the report as superficial. The NAO and the Comptroller and Auditor General put hours of work into that report—as did various members of the PAC. We probably studied the NAO report at greater length than any others; we held a second meeting on it. We were briefed on it on two occasions by NAO personnel involved in its production. For the Secretary of State to describe that report as superficial was a damning indictment of his failure to consider it fairly and objectively, not of the Committee itself.
For some months, the Secretary of State and other Defence Ministers based their objections to our findings on the line that there was "no new evidence". That has been their answer to everyone who objected to the original findings, which laid the blame on the pilots. Ministers say that, as there has been no new evidence since the original inquiry, there is no reason to change its outcome.

Mrs. Ray Michie: As my hon. Friend is aware, the report refers to problems with the full authority digital electronic control—FADEC—system as one possibility for the accident. Is he aware of a report in The Herald in Glasgow today, stating that the Ministry of Defence has carried out research into wind shear? That is
an atmospheric vortex capable of sending military aircraft out of control where high ground, rain, and sea combine at certain temperatures to create a sudden downdraught.
Apparently, helicopters are highly vulnerable to wind shear and are incapable of increasing engine power quickly enough to pull free.
I draw my hon. Friend's attention to that fact because there are so many theories and possibilities, but no definitive evidence to justify blaming the pilots.

Mr. Rendel: I am grateful to my hon. Friend for bringing that new fact to my attention. That could be new evidence that the Secretary of State might want to consider. I had not heard of it before; it is undoubtedly relevant and is a further possibility that should have been discussed. The finding that pilot error was the only possible cause must be highly questionable.
The Criminal Cases Review Commission looks back on past criminal cases where there was a finding of guilt. Such cases can be reconsidered in many circumstances. The Government should use that as a precedent in this case, so that they can reconsider and, if necessary, change the findings of the original board of inquiry.
In relation to the claim that there is no new evidence, I draw the attention of the Financial Secretary to comments made after the board of inquiry. When the original board of inquiry met, Wing Commander A.D. Pulford, its president, Squadron Leader E. J. Gilday and Squadron Leader P. L. Cole stated of Flight Lieutenant Tapper—among other things—that

it would be incorrect to criticise him for human failings based on the available evidence … The Board conclude that there were no human failings with respect to Flt Lt Cook—
the second of the two pilots.
After that, the board of inquiry report went up through various layers of the Ministry of Defence until it reached Air Vice-Marshal J. R. Day, who said:
unlike the Board and the Officer commanding RAF Odiham, I reluctantly conclude that the actions of the crew were the direct cause of this crash … I am … forced to conclude that Flight Lieutenant Tapper was negligent to a gross degree.
I cannot avoid the conclusion that Flight Lieutenant Cook was also negligent to a gross degree.
When the report finally went to Air Chief Marshal Sir William Wratten, he agreed, concluding that
the actions of the two pilots were the direct cause of the crash. I also conclude that this amounted to gross negligence.
The important point about the quotes from both the original findings of the board of inquiry and the findings of the Air Vice-Marshal and the Air Chief Marshal is that no new evidence was produced between the two different, completely contradictory findings, which were based on the same evidence, being reached. If anything proves that it is possible to reach two completely different conclusions on the same evidence, surely it is those quotes.
Begging the pardon of my hon. Friend the Member for Argyll and Bute (Mrs. Michie), even if there were no new evidence about other possible causes of the crash, it is absolutely clear that, even based on the original evidence, it is entirely possible to conclude that the two pilots were in no way to blame. Therefore, to my mind it is complete nonsense for the Secretary of State simply to say that, because no new evidence has been produced, he cannot overturn what the Air Chief Marshal and the Air Vice-Marshal said at the time. Since the original findings of the board of inquiry were reached, the verdict has been changed by the MOD itself without any new evidence being produced. So it cannot be beyond the Secretary of State to change that verdict again without any new evidence being produced.
I remind the Minister that Air Vice-Marshal Day, Air Chief Marshal Sir William Wratten and the Secretary of State stand on one side of the argument. The opposite conclusion, based on precisely the same evidence, has been drawn by the board of inquiry, the Scottish courts that looked into the matter, various RAF and aeronautical experts, various computer experts who considered the question of FADEC, the Public Accounts Committee, the public in general and the relatives and friends of the crew, above all others. Virtually everybody else who knows anything about the matter has concluded, on the same evidence, that the two pilots cannot properly be found guilty beyond all reasonable doubt. Just those three people have concluded that the pilots should be found guilty beyond all reasonable doubt.
Surely that must suggest that the matter should be reconsidered and that the Secretary of State was wrong to dismiss the PAC report in the way he did—so quickly and without taking a serious and objective look at the report and why it said what it did. I believe that the PAC will not allow the Secretary of State to get away with his dismissive response to our report. I for one shall not do so.

Mr. Alan Williams: The Chairman of the Defence Committee has attacked our Committee for not calling


either of the senior officers concerned. Does the hon. Gentleman think that we should perhaps consider holding a special hearing to which we should call both as witnesses?

Mr. Rendel: As the right hon. Gentleman will know, that would be a question for the Committee and for the Chairman, not just for me. However, I have a lot of sympathy with the view that, if the Secretary of State is entirely determined not to review his response to our report, we may need to hold another hearing at which those people could be called to explain, if they are able to do so, what possible reasons there could be for their having so dramatically overturned the findings of those who took part in the original board of inquiry.
I want to say a few words about the workings of the PAC in general, now that I have a year's experience on the Committee. Although we do excellent work, there is a lot that we do not cover or do not cover adequately. A huge amount of work comes before us and the National Audit Office produces a huge number of reports—no doubt it could produce more. I am sorry that the Chairman has had to leave the debate for the moment, but I hope that he will take the time to read my speech and consider the possibility of suggesting to Parliament that a second Committee or a sub-Committee be set up so that we can increase the frequency and depth of our hearings, although some other method of achieving that might be used. Subjects that could and perhaps should be properly reviewed by the PAC are being missed, although the work load for the members is colossal if we participate fully and properly in each hearing, given all the paperwork that goes with them and the need to read the reports produced subsequently.
There is a need for a more formalised structure for members of the Committee to ask further questions towards the end of a hearing. Under our system, the Chairman usually starts a hearing with a quarter of an hour of his questions, then we take it in turns to ask questions for a quarter of an hour. To ensure that hearings keep to time, the Chairman, rightly, is extremely strict, much to the annoyance of those of us who have just one further question towards the end of the 15 minutes. However, he is very generous in allowing members to return to a particular point at the end of a hearing, although there is no formalised structure under which that can be done.
A lot of members would like to ask questions based on answers given by people who spoke earlier in a hearing, so there is a difficulty for those who are lucky enough to contribute at the beginning. Officially at least, that early contribution could be a member's last chance to speak, even though points raised by other members may seem to have received inadequate answers. Members may want to ask a supplementary question about such answers, so there is a case for establishing a formalised structure under which members could re-enter the debate towards the end of a hearing.
There is a need to establish the possibility of holding a second hearing, perhaps a month after the original one. One such example has just been raised by the right hon. Member for Swansea, West and there might be others. Supplementary evidence might be provided after the event or members of the Committee may realise either that they

had not got to the point or, on reading the transcript, that an answer was inadequate and that more questioning was needed. People should have the chance to review the transcript and consider whether further issues need to be aired and further points made. At present, that can be achieved only by asking the NAO to put further questions to the witnesses in writing. That is perhaps less satisfactory than bringing the witnesses before the Committee for a second hearing.
There is a need to establish the possibility to make a formalised input to the recommendations of our reports. I may be inexperienced in these matters, but there are few ways in which one can ensure that a particular recommendation is made, at least before a draft report is produced. Members can talk to the NAO, as I have done, to suggest particular recommendations that it might like to include in a draft report for the Committee, but there might be a case for establishing a more formalised way in which to make such recommendations. Of course, it is possible to change the report after the draft has been produced, but that is a rather more complex matter. After a long hearing, it is often difficult to get many complex and detailed changes made to the recommendations. It might be preferable to make such changes at an earlier stage.
I am proud to have had the chance to serve on the Committee for the past year. I am delighted to have done so, because the Committee does vital work on behalf of Parliament. It involves some of the most important tasks that Opposition Members or Government Back Benchers can perform on behalf of Parliament and the nation. I hope that, with the House's agreement, my party will allow me to continue as a member of the Committee for some time to come.

Mr. Andrew Love: I apologise to you, Madam Deputy Speaker, and to the Chairman of the Public Accounts Committee, the right hon. Member for Haltemprice and Howden (Mr. Davis), for arriving after the start of the debate. I am also a little surprised that the hon. Member for Newbury (Mr. Rendel) finished his speech sooner than we might have expected when he started to speak.
Members will be glad to hear that I intend to make only a brief contribution on Government information technology and the lessons that I hope we can learn from many past failures. I do not have a particular interest or expertise in this subject, but it is an important element of the PAC's work.
My comments will draw heavily on the Committee's first report "Improving the Delivery of Government IT Projects". I hope to illustrate my remarks by also referring to the 7th report on the immigration and nationality directorate's casework programme and to the 24th report on the delays in issuing passports in 1999. In one report, my right hon. Friend the Member for Swansea, West (Mr. Williams) pointed out that we seemed to have got it wrong for people who want to get out of the country at the same time as we got it wrong for people trying to get in. That sums up the difficulties that we have had with information technology, and those problems go back a long way.
The problems of the Passport Agency were well documented. Headlines on the front pages in the summer of 1999 told us that a fiasco had turned into farce.


I represent a London constituency with a large ethnic minority population, many of whom are refugees. For that reason I echo the Comptroller and Auditor General's comment in the report on the immigration and nationality directorate's casework. He mentioned the enormous personal distress that had been caused by the failures in the directorate.
We can talk about the issues in rather clinical terms, but we should remember the human dimension that is often associated with failures in public services. I illustrate that point by mentioning a constituent who had worked for the previous regime in Afghanistan. If he had been returned to that country, he undoubtedly would have had a well-founded fear of persecution, and statistics show that 95 per cent. of the people who have come to this country from Afghanistan are allowed to remain. However, my constituent could not resolve his status.
My constituent's father, who lived in Germany, fell seriously ill, but my constituent was unable to travel to see his father. When his father died, he was buried with the family present. However, my constituent was unable to attend the funeral and it was a long time after the tragedy before he could travel anywhere in the world or visit close family members. We should remember the impact that such cases have and continue to have.
I visited the immigration and nationality directorate during the summer recess. Although I am the first to admit that significant progress has been made, undoubtedly the casework programme still faces major problems that must be ironed out. The problems of the national insurance recording system have also been documented and people continue to fail to receive the right amount for their pension or other benefits.
Such problems have occurred throughout the development of information technology. In the 1970s and 1980s, we carried out large projects. Although they were much simpler than those carried out today and were carried out in-house, outside experts being brought in, there were still problems. In the 1980s and 1990s, during the next steps and market testing regimes, departmental IT was separated out and sometimes privatised. The Government decided to contract out entirely the provision of IT services, but there were still failures. Now the projects are designed, built and operated mainly under the private finance initiative. Although I do not want to discuss the rights and wrongs of the PFI—other Members have commented on that—it is clear that there are still numerous problems with the provision of IT services.
In their recent modernisation White Paper, the Government have committed themselves to providing better public services, and they have given IT a high-profile role in achieving that aim. It will be at the centre of the renewal of our public services and there will be a massive increase in the electronic delivery of information and services to citizens and, just as important, to businesses. We can fulfil the commitments in the White Paper only if we have better procurement.
The one sign that gives cause for optimism is a consequence of the fact that we have had plenty of experience of bad procurement. Over the past 10 years the Comptroller and Auditor General has brought more than 25 reports to the PAC, cataloguing problems and failures in procurement. We should examine those lessons, and the PAC's first report details four stages in the delivery

of IT projects that must be improved if we are to make progress. I shall examine what should happen in each of those stages.
The first stage is inception and design. A cultural change must take place, because IT is often introduced as though it were an isolated part of a departmental structure. However, all the evidence suggests that it cannot be dealt with in isolation from the wider issues with which departments and agencies deal. For example, one part of the Passport Agency did not know what another was doing. The IT system was introduced while other significant changes were being made. The result was the failures that we saw in the summer of 1999.
The scale and complexity of some of the projects being undertaken is another important issue. If the White Paper is implemented, such projects will become more common and it is clear that incremental change can often be more effective than a big bang. Smaller, simpler, more manageable projects that make up the totality of a more complex IT system should deliver better and more effective procurement. The software used for casework by the immigration and nationality directorate was immensely complex and created enormous difficulties for the contractor. When I visited the directorate in the summer, I was pleased to see that the software had been broken down into several projects to be introduced over a period.
The second stage is the way in which IT projects are managed. We should recognise that they are not a marginal technical decision but part of the mainstream business activity of departments, and must be treated as such. We need to manage staff in a way that is appropriate for a project. We must provide training and incentives to keep staff with the project while it is introduced. The status of staff, especially in the public sector, must be appropriate to their responsibilities. Most important, staff must be accountable, not only for their success, but for any failures.
There is also the issue of contingency planning, which the Committee has noted is often missing. Such plans need to be in place if anything goes wrong with the introduction of information technology. There are many examples of that, but I shall concentrate on the immigration and nationality casework programme. It was decided that in some non-IT aspects of the programme, people who dealt with casework would work in teams, but because of software failures it was not possible to back up and provide proper contingency plans to allow the service to continue. If it was not possible to provide the service that was required, it was important that, at the very least, things were not made more difficult, so contingency planning is crucial.
The third stage is the relationship that a department should have with its suppliers. It is a truism to say that the supplier should understand and share the business objectives that a project is trying to achieve. That can be viewed in several ways. The roles and responsibility undertaken by the supplier should be fully defined in the contract that it enters into, but in the immigration and nationality project, Siemens, which was the main supplier, had not entered into a proper arrangement for remuneration when the project started. Not only was that a major failure of the contract, but it put at risk the value for money aspect of the project because it was not clear whether the company would deliver it on time, to


specification and on budget. No one could fully know that it would because the contract had not been properly detailed.
My right hon. Friend the Member for Swansea, West commented on late delivery in relation to other reports. The consequences of late delivery of a project must be reflected in the contract. That is relevant to any number of previous projects. The compensation that the Passport Agency received for the inadequacies of the main supplier was nothing to the amounts that it had to pay out to another supplier that was affected by the failures of the first. The Government received little compensation for the project on the national insurance recording system, but all the risk—my right hon. Friend the Member for Swansea, West touched on this matter—was not transferred to the supplier. The Government have been living with the consequences of that ever since.
The fourth stage is post-implementation of projects. There must be an open and constructive review that gets to the bottom of whether a project was delivered on budget and on time. It must find out what was right—and wrong—with a project and, of course, learn the lessons and ensure that they are taken on board. Once a system is introduced, the staff who operate it must be able to function effectively with it. It is necessary to commit time and resources for training, so that staff are brought up to a proper standard. Some people might think that that is obvious, but that is exactly what did not happen with the Passport Agency programme. The staff were not ready to work the system when it was implemented, which resulted in major delays.
The Government responded to the report some time ago and made a commitment to address all the issues that it raised and, on 22 May, the Cabinet Office published the report "Successful IT—Modernising Government in Action". The Cabinet Office works closely with the National Audit Office, which is reflected in many of the report's priorities.
I want to mention three priorities. The first is to improve skills, which is especially relevant to the public sector because it has great difficulty in attracting the sophisticated IT management skills that are needed. The second is to change the culture of the public sector by bringing IT into the main stream. It is no longer a marginal activity, and must be at the centre of everyone's consideration. The third priority is strong leadership when IT is introduced, which must come from the top.
The report made 30 recommendations, many of which have been or are in the process of being implemented. It outlines some notable issues. Permanent secretaries will be responsible for driving forward progress on IT projects. It will be interesting to see how that develops. The e-envoy, who has been introduced into Government service, will be responsible for the overall implementation of all 30 recommendations. That is a major task and I hope that he will receive the support of permanent secretaries in achieving that.
The report also recommends producing an interim report on the progress of the IT programme. I hope that the Minister will share it with the House when it is published this month because it is an important matter and we must get it right. The programme has a major impact on the public services that we provide, such as the

delivery of benefits by the national insurance recording system and, indeed, the provision of the information and services that are outlined in the White Paper on modernising government.
The Committee wants to ensure that there is value for money for the public purse, which is its main remit. Parliament has an interest in getting IT matters right and it is crucial that we provide services to the public that represent value for money. Parliament has a specific role to play and I hope that the Government will continue to work with it, and specifically with the NAO and the Committee, to ensure that all the recommendations in the White Paper are implemented and delivered.

Mr. James Clappison: This has been a relatively short but important debate on a significant occasion in the life of the House. I congratulate my right hon. Friend the Member for Haltemprice and Howden (Mr. Davis) and all the members of the Public Accounts Committee on their prodigious hard work in producing the 43 reports. Their work is of a very high quality. I associate myself with the tribute paid by my right hon. Friend to his long-serving predecessor, the right hon. Member for Ashton-under-Lyne (Mr. Sheldon), who made such an important contribution to the Committee's work.
The Committee fulfils an important and historic role on behalf of the House. Among the many other tasks that it performs, it defends Parliament's rights in scrutinising how money is spent. That is plainly evidenced by the conclusions of the Committee which we have heard about today, including those on the millennium dome, and what my right hon. Friend the Member for Haltemprice and Howden described in that instance as a
deplorable failure to keep Parliament informed.
The Committee also defends a vital public interest as regards the quality of public services and the quality of life. One needs only to consider the 42nd report on the control of hospital-acquired infections to see just how important that work can be.
Governments of any political description need to respond properly to the Committee's conclusions in all its reports. Untimely dismissals or rebuttals of its work are not only a discourtesy to the Committee but work against the public interest by prejudicing the future detailed and careful consideration of its work that is called for on the part of the Government. They need to take the time to learn the lessons arising from the Committee's work. I agree with my right hon. Friend's remarks to that effect.
I congratulate my right hon. Friend on his authoritative opening speech. He gave more than a hint of the diligence and toughness that lie behind his approach to the Committee and the important work that he carries out.
The right hon. Member for Swansea, West (Mr. Williams) made a thoughtful speech, most of which was devoted to the important subject of the private finance initiative. He was right to draw attention to the significance of PFI—there are now over £17 billion worth of contracts. He went on to analyse the benefits and problems of PFI. He recognised that there could be a benefit to taxpayers in passing on risk, but there could also be problems. He was right to bring his experience to bear in analysing those problems, in particular the need carefully to study the terms of PFI contracts and to have


robust terms on the public side to ensure that when problems arise, costs and inconvenience are not borne by the taxpayer and members of the public.
The right hon. Gentleman also mentioned clawback facilities, and drew attention to the absence of such facilities in a number of contracts entered into by certain Departments. There are lessons to be learned, and I suspect that the subject may well feature in the future deliberations of the Public Accounts Committee. I am sure that the Minister will want to respond to the right hon. Gentleman's points about particular Departments and the disparity in departmental practices as regards clawback facilities, as well as about the accountability of quangos.
The hon. Member for Newbury (Mr. Rendel) mentioned several of the Committee's reports. I hope that he will not mind if I do not follow him down every avenue of thought. He mentioned what he described as the danger of extra rainfall. As a junior Minister in the Department of the Environment who had to deal with the drought during the previous Government, I find that the danger of extra rainfall has not always been entirely self-evident. I hope that the same quarters who under the previous Government were complaining of too little rainfall are not now going to complain of too much rainfall. [Interruption.] I heard the word "inevitably" suggested. I do not know about that, but the hon. Gentleman's remarks certainly brought back some memories.

Mr. Rendel: The hon. Gentleman may conceivably agree that perhaps the lack of rainfall that we experienced in the past and the surplus of rainfall from which we are now suffering arise from the same basic cause, which is that we are doing terrible things to our environment as a result of the over-use of petrol.

Mr. Clappison: The hon. Gentleman advanced his views at some length in his speech, and I hope that he will not mind if I do not pursue that argument. I hope that he is not going to stand on the manifesto of having just the right amount of rainfall in just the right places—I think that I have heard that one before.
The hon. Member for Edmonton (Mr. Love) made what he described as a brief contribution, on government technology. He modestly said that he did not have a great deal of expertise in that field, but if that is the case, he has clearly done a lot of hard work because he made well-informed and interesting comments on the quality of procurement in information technology contracts.
The hon. Gentleman also mentioned the immigration and nationality directorate casework programme, and drew attention to the fact that not only has it involved a substantial waste of public money, but there is an important human dimension to the matter because it has caused anguish to genuine asylum seekers who are in the queue caused by the backlog, waiting for their cases to be dealt with. The hon. Gentleman mentioned constituency cases; I have had similar cases, and I am sure that other hon. Members have too.
I want to deal with two general points arising out of the debate. I cannot tackle all the subjects covered by the Committee, although they are all important in their own way. My right hon. Friend the Member for Haltemprice and Howden did the House a service at the outset by seeking to draw together some of the Committee's work and the lessons that the Government need to learn. He is

right when he says that that is an important part of the Committee's work. Recently the Committee has turned its attention to the importance of improving the delivery of Government IT projects, drawing on published reports and taking an overall view on the subject.
As the Committee made clear, the successful implementation of IT projects can bring many benefits to Governments and citizens. There are also risks involved in that implementation, and all too often those risks have been realised. It is implicit in the Committee's conclusions that more needs to be done to avoid the problems that have arisen in all too many cases. The Government need to be aware of the undesirable consequences of IT failure, including, not least, as the Committee points out, the waste of enormous sums of public money and the cost in terms of inconvenience or hardship because of disruption to public services.
A prime example, which has been mentioned several times, is the Passport Agency. My right hon. Friend used the word "fiasco" to describe that example. The worst feature of the fiasco was that so many members of the public bore the brunt of the consequences. The Committee has performed a singular service to the Government in drawing together those lessons in its report, and we must all hope that the Government will seek to learn them.
Finally, I turn to a subject that almost every Member who has spoken in the debate has mentioned. It is a proper subject for the Committee's consideration. I refer to the 45th report on the acceptance of the Chinook helicopter. The Committee's approach was justified, and it was certainly not straying beyond its remit; it was acting well within its historic role and in the public interest. During its work, the Committee came to consider the tragic case of the crash of Chinook ZD-576 on the Mull of Kintyre.
The conclusions of the Committee, reached after a clearly careful and painstaking inquiry, have important implications for the Royal Air Force board of inquiry findings in respect of the crash. I have not had the advantage of participating in the inquiry or of hearing the witnesses, but I take careful note of the Committee's conclusions, in particular:
The finding of the RAF Board of Inquiry into the crash of Chinook ZD-576 does not satisfy the burden of proof required
and the broader conclusion:
The process for convening and conducting RAF Boards of Inquiry is unsatisfactory.
In the light of the Committee's findings about the specific board of inquiry into the crash and the conclusions of the Scottish courts and others, which are reinforced by comments made by right hon. and hon. Members today and on other occasions, one can say only that matters cannot be left as they stand.
The Government have yet to respond formally to the Committee's report, but their early—if not premature—public comments suggested that they were minded to continue to support the findings of the board of inquiry. I understand that it might be difficult for the Financial Secretary to the Treasury to deal fully with the matter today, but the Government more generally need to think again. The Committee's report and everything else we have heard mean that their current position is untenable. The interests of justice must come first. That tragic case must be revisited.

The Financial Secretary to the Treasury (Mr. Stephen Timms): In last year's Public Accounts Committee debate, I expressed the hope that, unlike my recent predecessors, I would be able to listen to the following year's debate when it came around. I am happy that my wish has been fulfilled.
I begin by echoing others' words of appreciation for the Committee and its Chairman, the right hon. Member for Haltemprice and Howden (Mr. Davis), and their indefatigable efforts in the past year. In last year's debate, I paid tribute to the right hon. Gentleman's energy, allied to
real concern about standards of behaviour and value for money in Government—[Official Report, 25 November 1999; Vol. 339, c. 841.]
and he has continued to display those characteristics since then. I also endorse his generous and entirely warranted tribute to his predecessor, my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), which has been echoed by others, including the hon. Member for Hertsmere (Mr. Clappison). The right hon. Member for Haltemprice and Howden is right to say that his predecessor deserves much of the credit for the Committee's current status and reputation. My right hon. Friend will be missed when he retires from the House at the next election.
Those of us who have sometimes been on the receiving end of lobbying by the PAC will know that the Committee's Chairman does not work alone. He is amply supported by other members of the Committee, especially my right hon. Friend the Member for Swansea, West (Mr. Williams), whom I thank for his kind remarks, and the hon. Member for Newbury (Mr. Rendel). I am pleased that all three now serve on the steering group in respect of the Sharman report, which will look into issues that we have debated in the past, in the Committee on the Bill that became the Government Resources and Accounts Act 2000 and elsewhere.
As in last year's debate, there are 40 or so reports before the House. The right hon. Member for Haltemprice and Howden says that the PAC has been less prolific in the past year than in previous years, but I believe that there is roughly the same number of reports on the Order Paper this year as last. It must be in recent months that the Committee's prolific production of reports has abated somewhat. Of course, some of the reports mentioned are not on the Order Paper, because the Treasury response to them has not yet been published.
I am sure that the Committee must be the best informed in Parliament on the workings of Government. I certainly understand why the hon. Member for Newbury says that PAC members pick up fascinating insights into those workings and how they affect the lives of ordinary citizens and taxpayers. The Committee is ably assisted in its work by the diligence of the Comptroller and Auditor General, Sir John Bourn, and his staff at the National Audit Office, and by the Comptroller and Auditor-General for Northern Ireland, Mr. John Dowdall, and his staff at the Northern Ireland Audit Office, to whom I am pleased to pay tribute.
The past year has witnessed the most significant development in Government accounting since Gladstone—he always seems to be the cornerstone of such superlatives. The whole basis on which Parliament provides funds to the Executive and on which the Executive account to Parliament for the use of those funds

will be fundamentally changed by the introduction of resource accounting. The Government Resources and Accounts Act 2000 represents the culmination of many years' work on the change by the current Administration and previous ones. I pay tribute to the conscientious work of the NAO and the Chairman and members of the PAC in scrutinising that Bill. The advice of the NAO, the hearings the Committee held, their reports and the contributions made by Members of Parliament in the House were influential in significantly improving the Bill. I am pleased that the Government were able to take on board so many of the suggestions made.
The Act also gives the Treasury powers to incur expenditure to establish Partnerships UK, which is the successor to the Treasury private finance initiative taskforce. Partnerships UK was launched in the summer and has already started work on a number of important public-private partnership projects. It will help to ensure that those partnerships are better structured and more efficiently procured, and that they deliver better value for money to the taxpayer. Last week in South Africa, I was pleased to be able to announce that Partnerships UK is to provide support to the South African Government in the establishment of PPPs to improve public services in that country.
Shortly, we shall make a commencement order to bring into force the majority of the provisions of the Act. Those include the provisions required to replace appropriation accounts and cash-based supply with resource accounts and resource-based supply from 2001–02 onwards, and certain powers relating to the production of whole-of-Government accounts and other powers to improve the way in which Government accounts are prepared and produced.
As well as that Act receiving Royal Assent, this year has seen significant milestones along the road to the full implementation of resource accounting and budgeting. Departments have made significant progress in the preparation of resource accounts and resource-based estimates; Parliament, through the PAC and other Committees, approved the Government's timetable for the introduction of resource accounting and budgeting; and the spending review 2000, which set out spending plans for 2001–02 to 2003–04, was conducted on the basis of resource budgeting.
From the outset, the PAC endorsed the more commercial approach brought about by resource accounting and budgeting. The Committee acknowledges that it should improve the clarity and the quality of the financial information that is available to Parliament and that it will assist departmental management. I am confident that the change to resource accounting and budgeting will bring significant benefits to the overall management of public expenditure and the management of individual departments. With others, I look forward to those benefits being realised.
We plan to introduce consolidated accounts for the central Government sector from 2003–04 and full whole-of-Government accounts covering the full scope of the public sector from 2005–06. Whole-of-Government accounts will provide better quality, more transparent data for the planning of fiscal policy; better management of public services; and more effective distribution of resources. We look forward to the PAC and the NAO


contributing to the development of whole-of-Government accounts in the corning months and to working with them on that.
Without doubt, the most intense debates on the Government Resources and Accounts Bill were those relating to the audit and access rights of the Comptroller and Auditor General. I acknowledge again the tenacity with which members of the Committee that considered the Bill pursued the rare opportunity—as they saw it, with some justification—to extend the CAG's rights. The Act contains a new statutory right for the CAG to inspect documents held by contractors that are carrying out financial functions for Departments, and powers for the CAG to be appointed auditor of bodies that he is currently prevented from auditing by statute. It also contains powers for the CAG to be granted access to documents held by third parties. I imagine that those are the measures that constitute the 99 per cent. that was referred to by my right hon. Friend the Member for Swansea, West.
The Government have made it clear that we will implement the powers in the light of the outcome of Lord Sharman's review of audit and accountability in the 21st century, which is expected to be completed early in the new year. It is considering exactly what is public money, what degree of audit and accountability is appropriate to public money and what are the appropriate arrangements for those in receipt of public money to account to Parliament. We shall be receiving conclusions in the fairly near future.
When considering the Bill, we gave an extensive airing to performance validation. This Government have been much more open and transparent about performance monitoring than previous Administrations. In particular, we have published public service agreements, with 160 top-level targets set out in the July spending review announcement. We have also published service delivery agreements, which set out in more detail how the Government will meet their PSA targets. I believe that the targets will help to ensure that there are fewer of the shortcomings in public service delivery which the Committee has identified in a number of the reports that we are considering.
The interest taken by the Committee and the NAO in the progress of modernising government has been helpful. I welcome the PAC's encouragement of joint accountability for the delivery of objectives that do not fit easily into traditional Whitehall structures. I hope that there will be more joint hearings, such as the one to which the right hon. Member for Haltemprice and Howden referred on the criminal justice system, the subject of the Committee's 27th report. I hope that we shall receive further recommendations from the Committee on how joint accountability structures in government might be improved. They can sometimes be difficult to set up successfully.
The modernising government agenda also covers important areas of procurement and project management, to which several right hon. and hon. Members have referred, especially in the context of IT projects. That has been a continuing concern for the Committee, as the reports set out on the Order Paper demonstrate. That is particularly the case of the first report on the improving delivery of the Government IT projects. Subsequent reports have been referred to as well, including those on the Passport Agency—I think that that is the 24th report—

and on the immigration casework system, which is the seventh report. Many important lessons have been drawn from all the reports.
My hon. Friend the Member for Edmonton (Mr. Love) illustrated vividly the personal consequences for individuals when things go wrong, and the importance of ensuring that they go wrong as infrequently as possible. It is important also that we learn lessons from the problems of the past.
In April, the Government established the Office of Government Commerce. Its role is to provide a firmer sense of direction in procurement, and to ensure adoption of best-practice approaches in the public sector. I visited the OGC a couple of weeks ago and was impressed by the determined way in which it is setting about its role. It has set an ambitious target of securing £1 billion of value for money gains as a result of its work, and is making progress in a number of ways, of which I shall single out two.
First, the OGC is developing a new and independent review process for all new procurements—the so-called gateway process—which will tackle known weaknesses in handling large projects, especially in IT and construction. This was foreshadowed in the recent Cabinet Office report on improving IT project performance. I am pleased to say that pilot testing of the gateway process has confirmed its capacity for improving value for money, timeliness and cost management of high-risk procurements. Further details of the process will be announced early in the new year.
My hon. Friend the Member for Edmonton referred to the interim report and guidance that is due. I understand that that is already available on the central information technology unit website.
The second initiative is that the OGC is harnessing the Government's collective purchasing power to improve the way in which Departments manage suppliers. For example, it is gathering information about key IT and non-IT suppliers for dissemination to Departments. It has employed a consultancy supplier to develop a mechanism to collect and analyse procurement expenditure across central Government, which will report by July 2001. It is also taking steps to improve the Government's relations with their strategic suppliers, which are being assessed in terms of their criticality to Government business, the value of spend and the availability of substitutes and their strategic influence.
We want to ensure that we understand well the nature of the business that we have across Government with those who supply the Government. In the past, there has often been too much fragmentation. Companies have known much more about their business with Government than the Government have known about their business with them. I hope that the Committee will take some encouragement from these developments. They will provide an opportunity to implement some of the lessons drawn from the work of the Committee.
I shall say more about the private finance initiative and public-private partnerships and pick up the points made by my right hon. Friend the Member for Swansea, West. We have taken a range of measures to improve the PFI and to generate other forms of PPPs, which have brought greater clarity and confidence to the public and private sectors alike. They hold out the promise of significantly better outcomes. We have undoubtedly been helped in that process by the Committee's work.
Since May 1997, PPP contracts have been signed for 259 projects, generating £12.6 billion of private sector capital investment. Another 296 projects are in procurement, with the potential to generate an additional £16.2 billion. That will take us to nearly £30 billion of investment. I welcome the support that my right hon. Friend the Member for Swansea, West expressed for the principle of that approach.
The PFI and other forms of PPP are delivering value for money for the taxpayer and good-quality services for our citizens, and making an increasingly important contribution to modernising government. The Committee has continued to be active in examining PFI projects, and has produced many valuable recommendations. I was reading the Committee's 41st report on the Prime project. Many innovative features negotiated by the Department of Social Security were recognised in what was a large and complex PFI project—possibly the largest ever undertaken by a central Government Department.
I remind the House of the Committee's view of the initiative. The Committee stated:
We welcome the risk transfer incorporated in the contract on capital expenditure, particularly with respect to achieving compliance with statutory requirements for disability access. We recommend that future deals of this kind examine the risk transfer achieved in the PRIME case and seek to emulate it where appropriate.
I am glad that the Committee has been able to recognise that, in that instance and in others, PFI has worked well, and to draw the attention of others to such examples. I am especially pleased that my hon. Friend the Under-Secretary of State for Social Security is on the Government Front Bench listening to the debate.
My right hon. Friend the Member for Swansea, West also referred to the potential windfall gains from refinancing PFI contracts, which has been a major issue in the recent PAC hearing on Fazakerley prison, and reference was also made to Dartford and Gravesham hospitals. Steps have been taken to reduce the chances of such problems recurring. The standard contractual terms produced in 1999, together with the development of the PFI market under the Government's proposals, make it much less likely that new PFI deals will result in windfall gains for the private sector of the kind to which my right hon. Friend referred. However, if there is evidence that such problems have recurred since 1999, I should be interested to see it.
Guidance to cope with the residue of previously agreed deals has been issued by the Office of Government Commerce. Departments are encouraged to seek an equitable outcome in cases where their consent is required to contractual changes or revised financing arrangements. In practice in such cases, that should result in the sharing of gains with a private sector partner on a 50:50 basis, to which my right hon. Friend the Member for Swansea, West referred, unless sound reasons exist for departmental accounting officers to move from that position. However, some older contracts may not have been changed and the problem could still arise.
As the Committee has noted on more than one occasion, competent risk management is as crucial for the successful management of projects and other operations in government as it is in the private sector. That is why

the Government have embarked on an important initiative to support that aim. In line with private sector initiatives to improve corporate governance and the management of risk, we are introducing a new procedure whereby each year accounting officers signing off the accounts of Departments will need to confirm that their Departments have satisfactory systems to review the adequacy of internal control. Moreover, those statements will be reviewed by the CAG. Again, I am delighted to acknowledge the NAO's important contribution in developing those new arrangements, which will be introduced in 2001–02.
The right hon. Member for Haltemprice and Howden and the hon. Member for Newbury spoke particularly about the huge systemic failure in inherited SERPS—the horrifying breakdown in the machinery of Government in the past 10 years, to which the right hon. Gentleman referred. It is vital that no such breakdown recurs. I am pleased that both Members welcome the announcement on those problems made by the Secretary of State for Social Security.
I want to deal with the exchange between the right hon. Gentleman and the hon. Gentleman on whether letters of direction might be placed in the Library. Of course, some directions might relate to commercially confidential matters, but I should like to consider carefully the suggestion that the normal expectation would be that directions issued to accounting officers should be placed in the Library. I shall reflect on that matter.

Mr. David Davis: As the Minister will know, I was thinking on my feet when I responded to that question. Letters of direction might involve commercial confidentiality or security implications, both of which would be inappropriate to be placed in the Library.

Mr. Timms: The right hon. Gentleman is absolutely right about that. He and the hon. Member for Newbury are right to suggest that, in general, such action should be considered, and I shall certainly consider it. Such letters are already copied to the CAG, who may investigate them if he wishes.

Mr. Rendel: I am slightly confused about whether the Minister can choose whether such letters should be placed in the Library. I should have thought that the Chairman of the Committee—or perhaps the whole Committee—would choose whether the letters should be placed in the Library, although the Minister might wish to consult the Chairman.

Mr. Timms: I am grateful to the hon. Gentleman; I shall also reflect on that point, together with the right hon. Gentleman.
As always, this year's debate on public accounts has been reassuring and instructive. It has been reassuring because it shows that the long-established parliamentary scrutiny on which we pride ourselves is as effective and searching as ever. It has been instructive because that scrutiny provides an opportunity to show how procedures can be improved, as well as providing a vehicle for justified criticism when projects are not properly thought through. Of course there will be disagreements from time to time, but such debates help to take forward the wide range of concerns that the Government and Committee share.
I conclude from the debate that the Government need to focus on two matters. First, we must continue to improve the management of the systems by which public money is collected and deployed. Secondly, we must continue to improve the management of projects to deliver public services. The Committee's reports continue to make those priorities clear, and I am happy to endorse them.

Question put and agreed to.

Resolved,
That this House takes note of the 39th and 41st Reports of the Committee of Public Accounts of Session 1998–99, of the 1st to 9th and 11th to 37th Reports of Session 1999–2000, and of the Treasury Minutes on these Reports (Cm 4576, 4593, 4656, 4695, 4688, 4732, 4758, 4798, 4822, 4863, 4886 and 4901).

Housing Benefit

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Touhig.]

Ms Karen Buck: I am pleased to have the opportunity to raise this issue, which is of considerable importance to my constituents and to claimants across the country. When I was a little girl and asked my mother, "What shall I be?" in the Doris Day tradition, she never suggested as a career becoming a housing benefit nerd. I fear that it would have been sensible if she had given me that advice because I have taken the path of housing benefit nerddom.
I make no claim to have housing benefit expertise. Probably only four people in the world understand the housing benefit system—one more than those who understand the Schleswig-Holstein question. I have never attempted to include myself in that august elite, but I have donned the honorary anorak of housing benefit obsession, especially in recent months as the implications of the near collapse of housing benefit administration in my constituency have become clear. I lost the bloom of youth serving on housing benefit review tribunals during my career in local government in the early 1990s. Since then, as my hon. Friend the Minister is aware, the Select Committee on Social Security has examined several housing benefit administration issues.
The reason I have that underlying obsession is that, although housing benefit has never been a topic of conversation guaranteed to enliven parties, it matters a great deal, especially to the most vulnerable people in society—those who depend for the security of their homes on their housing costs being met efficiently and promptly. When the housing benefit system goes wrong, as it has in my constituency and many other parts of the country, it causes levels of distress and anxiety that no one should have to suffer, as I shall show during my speech.
I want to make one or two other points before I deal with the main issue. Although the task will be fiendishly difficult, I strongly believe that housing benefit reform must be one of the next Labour Government's key priorities. I do not underestimate the difficulty and complexity of the task, but simplifying and improving the housing benefit system is an absolute precondition if we are to build on the excellent foundations of the taxation and social security system and to improve work incentives, tackle poverty and ensure choice in the housing sector. Many policies have cried out for change.
Those issues were set out in detail by the Select Committee on Social Security and include single room restrictions for the under-25s, the high levels of non-dependant deductions and the operation of emergency payments for families on low incomes facing housing benefit restrictions.
Although I have not studied them in detail, I am aware of the welcome announcements made this week by my right hon. Friend the Secretary of State for Social Security. No doubt my hon. Friend the Minister will refer to them. I am also aware of the content of the Government's response to consultation relating to the housing Green Paper. I warmly welcome the indication, in both those responses, of changes that will be made in the tackling of problems with the administration of housing benefit, and of flaws in policy.
I am very pleased that the Government have decided not to restrict backdating of housing benefit, following consultation and advice from the Social Security Advisory Committee and lobbying from local authorities and other specialist organisations. The restriction of backdating would have been seriously damaging to vulnerable clients, especially in view of the enormous difficulties experienced in many parts of the country with the delivery of housing benefits.
In half my constituency—the part covering the Conservative-controlled London borough of Westminster—the outsourcing of benefit administration to Capita put the system into free fall. At one point in the spring there were 23,000 items of post backed up. I am genuinely pleased that the situation is now under a degree of control, but at the last count a wholly unacceptable 10,545 items of correspondence remained to be dealt with, and according to reliable information the number of payments to meet rent rebate claims was decreasing at the last count.
During the midsummer peak of the crisis, claimants—many of them elderly—were sometimes required to queue for three hours at Westbourne house. Some claimants have told me of having to queue for five hours. Those who have attempted to sort out their problems at housing benefit offices have been told early in the morning that there is no point in waiting. They have gone away again and again, increasingly frustrated and anxious about the implications for them if they do not receive housing benefit.
The service offered to people who try to deal with their problems in person is appalling. One lady who spoke to me had waited at the housing benefit office for two hours, with her documentation, and had then asked to use the toilet. She was told that there was not one available for public use, although she had a medical condition. I understand that a toilet is now available, but that it is kept locked and claimants must ask to use it.
Public interaction with the social security system in all its forms is critical. Claimants who are overwhelmingly genuine and, in many cases, vulnerable deserve to be treated efficiently, and with respect to their dignity. If they are not treated in such a way, their experience of Government will be undermined. That is a dangerous and unpleasant fact, but it has been demonstrated in a number of cases.
Councillor Alexander Nicholl, chairman of the council's contracts committee, told Inside Housing magazine that the situation was
not the tragedy people were making out.
I doubt that that dismissal of claimants' concerns will greatly comfort my 85-year-old constituent who made a housing benefit claim in the summer, which then became stuck in a queue along with all the other claims. Having never owed money before—as is the case with a great many claimants—my constituent is unable to sleep because of the anxiety caused by five months' rent, and is selling items of furniture to tide herself over.
My client Mr. Habboushi has not received housing benefit for more than 12 months. Set after set of original documentation has gone missing. I have referred the case to the local government ombudsman who, it seems, has also been unable to obtain a reply from the council since the middle of the summer.
One young man who had been housed by the council because of mental health problems—through the community care housing policy—became so agitated by all the problems involved in sorting out his claim that, according to his carer, he handed in his key, and is now assumed to be sleeping rough. One lady has been asked on five occasions for her husband's death certificate; another lady with terminal cancer has a county court judgment against her for unpaid debts. My constituents are running up rent arrears amounting to thousands of pounds—£11,000 in one instance. They are experiencing the profound distress of receiving notices seeking possession from their landlords because of debts that are not of their making.
Following up a case with the West Hampstead housing association, which I believe is pretty typical, I was told:
You mention that the family received a notice seeking possession. These are issued to all clients when their arrears go over £2,500. This allows them to take the notice to the housing benefit department to help speed up their applications.
What an indictment of the system—only when people are threatened with homelessness can priority be given to their claims. Can hon. Members imagine the anxiety and fear caused to parents with young children, and to elderly and sick or disabled clients, by the receipt of an awesomely imposing legal document telling them that because of unpaid debts they will lose their homes?
The problem is, of course, by no means confined to Westminster. Some authorities are undoubtedly worse, although I do not think that should let the Conservative flagship authority off the hook. The housing charity Shelter has drawn my attention to cases outside my constituency. One involves a lone parent with three children, who ended up in court in a repossession hearing after her council had lost her claim form and refused to accept that a claim had been made. The court found in her favour, but at what cost, given the anxiety and distress that she experienced?
In another case, a single man waited seven months for his claim to be processed. Only when Shelter threatened a judicial review did the council make a payment, a full 11 months and £5,550 of debt later. The man has now been notified that his benefit was stopped again in July, as the normal 52-week review period was required.
Landlords themselves, both private and public, are also suffering. Housing associations are so stricken by cash flow problems that they are resorting to issuing notices seeking possession to spur the council into action.
Notting Hill housing trust provides a wide range of housing services in London—it is a valued local landlord of mine—but, in my view, none of those services is as crucial as the provision of temporary accommodation for homeless families, on behalf of local authorities. Families are often in a desperate state when they have lost their homes, but the housing trust puts them together again. Children are settled at school, and families begin to regain their self-respect and their ability to stand on their own feet.
What a disaster it is that those people must face a bureaucratic, cumbersome and badly run housing benefit service. The Notting Hill trust helps 515 families on behalf of Westminster city council. Arrears have been rising fast, from £500,000 in April to £1.3 million last month. Given the slow progress of claims, it is hard for Notting Hill, and other landlords and housing


associations, to know what they are genuinely required to collect from their tenants, and what is due from the council.
Notting Hill—this is a matter of profound regret to me—recently told Westminster city council that it could no longer provide for homeless families, until the position improved. I believe that other housing associations have considered the same action. Such decisions are very serious, because they increase the likelihood of vulnerable families' going into bed-and-breakfast accommodation—something that all civilised people want to avoid.
I know that staff in Westminster city council and elsewhere are working hard to speed things up, and I pay tribute to them because I know how much stress they experience, but this is no way to run a system in the long term. We know of the problems underlying the crisis. There was an ill-considered outsourcing to companies, including Capita, which were clearly not prepared for the scale and complexity of the task that faced them. Some responsibility must fall on Westminster city council for the inadequacy of the original contract, and some must fall on Capita and other companies that patently underestimated the scale of the task.
The performance of local authorities varies, and poor performers must take their share of the blame. Nevertheless, I believe that central Government had a case to answer. Regulations have been introduced at a wholly unrealistic pace, placing unreasonable demands on local authorities—I believe that some 80 have been introduced in the last year. Moreover, local authorities have historically been inadequately funded for the administrative tasks that they are being asked to undertake on behalf of central Government.
The verification framework, while entirely laudable in principle, has placed too heavy a burden on authorities and urgently needs to be reviewed with an eye to simplification. The requirements of the verification programme place local providers, such as the Church Army, St. Mungo's and Wytham Hall which work with homeless families, in particular difficulty.
In my constituency work, I deal with many refugees whose original documentation has been locked away inside the immigration and nationality directorate, sometimes for years, thereby making it impossible for them to present the verification documentation required by housing benefit departments. There remains great scope for joined-up thinking between the Home Office, the Department of Social Security and the local government agencies under the Department of the Environment, Transport and the Regions, to determine whether some of the documentation requirements are unrealistic and should be reviewed.
I very much welcome the Minister's indication that, at least initially in a pilot, registered social landlords may be allowed to use other verification documentation. I know that registered social landlords have asked for and would welcome that facility, which I think would significantly reduce the burden.
As I said, this week's announcements go a considerable way towards meeting my wider concerns about administration of housing benefit, and I particularly welcome the positive and constructive tone in which they have been made. They contrast with the previous Government's total indifference on the issue. Over

18 years, they let housing benefit take the strain of housing costs and created many of the problems that we are now trying to tackle.
We are on the right road, but there is much more to be done to simplify the system, reduce the administrative burden on councils and remove some of the harsher policy elements in relation to non-dependant deductions, rent restrictions and the other issues flagged up in the Select Committee on Social Security.
I believe that we may be close to ending the administrative chaos that has blighted so many lives in recent months and years. Will the Government please ensure that they follow through on the proposals announced earlier this week and help to ensure that local authorities which, for whatever reason, are providing a completely inadequate service are enabled to deliver properly for housing benefit claimants?
Will my hon. Friend the Minister also promise that long-term reforms will be built on to extend and develop the proposals that were announced this week, so that we can seriously consider options such as fixed-term payment periods—for 12 months for pensioners and six months for people of working age, which I think go a little beyond the proposal that has already been announced—and a full review of the current system of rent restrictions? Will she also assure me that, in the coming months, organisations such as the National Association of Citizens Advice Bureaux, Shelter, the Chartered Institute of Housing and the National Housing Federation—which has played a very constructive role in the dialogue on housing benefit reform—are fully consulted on the necessary changes?
Thank you very much again, Madam Deputy Speaker, for giving me the opportunity to raise this issue. I look forward to hearing the Minister's reply.

The Parliamentary Under-Secretary of State for Social Security (Angela Eagle): I congratulate my hon. Friend the Member for Regent's Park and Kensington, North (Ms Buck) on securing such a timely debate on an extremely important issue. I think that she undersells herself when she says that she is a nerd and an anorak who is not an expert on housing benefit, as she is very knowledgeable about very complex subjects. She is also a doughty and expert campaigner on behalf of her constituents, who I am sure are very proud of her.
My hon. Friend is fortunate in her timing because, as she said, yesterday we published our response to the housing Green Paper, which proposes radical measures to achieve rapid improvement in the administration of housing benefit. As yesterday's announcement was covered in just one paragraph in one newspaper, I have to agree with her that the media do not always treat housing benefit claimants and serious problems with housing benefits as newsworthy. They certainly do not cover our struggles in trying to improve the situation.
I profoundly agree with my hon. Friend on her points on public interaction with the benefits system. Each week, £2 billion in benefits are paid out in the United Kingdom, and, each day, the Benefits Agency receives 600,000 telephone calls. Those statistics do not include the transactions handled by the 409 local authorities that currently administer housing benefit. Housing benefit reform is therefore central to implementing our modernisation of the very run-down and under-invested system that we inherited.
We must give higher priority to providing a much better service to those who interact with the benefits system. Some of the examples that my hon. Friend cited of the service provided by Westminster city council are simply not acceptable. It is totally unacceptable that there should be a lack of toilets or endless waiting to solve a problem that is not even of one's own making.
Currently, 4.3 million people receive housing benefit, and it supports many more in their homes. Improving housing benefit delivery is vital. It is in all our interests that those who administer it do so effectively, efficiently and securely, delivering a service that—as my hon. Friend said—gives people on low incomes the help that they need for a decent home. As she also said, when provision goes wrong, it can cause profound stress and anxiety. I am personally very aware of that.
In 1997, we inherited a system that was fragmented—with 409 different local authorities administering it—over-complex and very neglected by central Government. That neglect meant that, although a handful of councils were delivering housing benefit successfully, many more were struggling, and no help was forthcoming to overcome the situation.
The problems of housing benefit administration were magnified by the unacceptable levels of fraud and error in the system. The system established by the previous Government made it possible, for example, to access housing benefit without a national insurance number or any other proof of identity. We could not allow that situation to continue. We have been working very hard to remedy such problems, and we are determined that local and central government should work together to overcome the neglect facing the housing benefit system.
Conservative Members are looking for a quick fix for the problems facing housing benefit, and they have suggested some solutions—such as removing responsibility for delivery from local authorities when there are backlogs. Although I do not know how they intend to define a backlog or make the change, they say that the change will save a quarter of a billion pounds. The proposal is, however, utterly illogical, as none of their proposals would make the system cheaper.
Some local authorities do a good job of administering housing benefit, and we want to encourage the others to raise their standards to that of the best. The best way of dealing with the current situation is to improve the standard of local authorities that have fallen behind and encountered difficulties. The challenge of modernising housing benefit would certainly not be helped by a huge and costly upheaval in infrastructure, personnel and information technology. We also do not believe that, in the foreseeable future, there is a convincing case to support removal of responsibility for housing benefit delivery from local authorities. We certainly do not want to create the type of planning blight that would occur if there were any uncertainty about the matter. The Government firmly hold that view.
The housing Green Paper has explained our reform strategy. As my hon. Friend graciously said, the Government have listened to those who have commented on our specific proposals and on other proposals such as those on backdating. Our response contains a

wide-ranging package of measures that will both give support to the local authorities administering housing benefit and raise the standard of service to tenants.
The measures that we have announced will help us to achieve four aims: first, to bring swift improvements to the performance of struggling councils; secondly, to raise standards across the board; thirdly, to streamline housing benefit, thereby making it easier for councils to administer and—equally importantly—simpler for people to claim; and, fourthly, to lay the foundations for long-term and fundamental reform of housing benefit.
My hon. Friend might have noticed that, at the beginning of this week, my right hon. Friend the Secretary of State for Social Security announced not only a three-year rather than one-year settlement for funding housing benefit, but an extra £24 million—which we believe will help to ease some of the current problems.
The fundamental challenge facing housing benefit is its administration and we have made that our immediate priority. We are setting up and funding an expert help team which will work with struggling local councils to help clear delays in paying housing benefit. The team will draw on experts from top performing councils, the DSS and management specialists to support authorities which have built up backlogs in paying out benefit.
The team will identify what is going wrong in a local authority and identify what action is needed. It will help local authorities to access resources for clearing up immediate problems such as backlogs, and to prevent problems from recurring by developing and then implementing local improvement plans. Because some local authorities succeed in delivering housing benefit well, that approach will allow us to target help where it is most needed. It also proves our commitment to work in partnership with local government to sort out the administration of housing benefit.
We shall establish a set of consistent national standards which we will back up by reliable and accurate information on how local authorities are actually performing. Much of that information is not available at the moment. That will allow us to develop a subsidy that links payment for administration to performance, as well as supporting the improved delivery of housing benefit and the better management of change.
The performance framework will build on the administrative improvements being brought about by best value and help local authorities to strive towards the aim of consistent national standards. We will seek to make sure that local government is accountable to its taxpayers by publishing league tables of council performance. That will not further encumber local authorities with wasteful bureaucracy, but it will build on the successes of best value and raise standards of administration across the board.
The housing Green Paper outlined the need to ensure that those without work had a decent and stable base from which to begin the search for employment. Many respondents were concerned that this was not always the case for young people. We share that concern.
My hon. Friend has lobbied us all about the effects of the single room rent. We are therefore broadening the definition of the single room rent to achieve three aims: first, to help provide young people with stable and reasonable accommodation so that they can concentrate their efforts on finding work; secondly, to ensure that the


rent that housing benefit pays better reflects the type of shared accommodation available in the private sector; and thirdly, to encourage landlords to rent to young adults. We do not, however, agree that the single room rent should be abolished completely. It would be unfair if unemployed young adults could afford better accommodation than their working peers.
At present, the multiple and lengthy paper claim forms which are often duplicated between the different organisations involved both delay housing benefit delivery and cause frustration for the tenants. We will develop a more streamlined approach that cuts down on bureaucracy, giving an improved service delivery to the client as well as securing the system against fraud and error. Streamlining the housing benefit claims process will allow local authorities to devote more time and resources to improving delivery and customer service through reducing bureaucratic burdens.
It is not only the initial claims process that needs simplifying. We want to make sure that housing benefit does not act as a disincentive to returning to work. We plan to ease the transition into work by removing the need to make a new claim for housing benefit on starting work: we will explore with local authorities whether starting work could be treated as a change of circumstances, allowing a speedier payment to be made. That proposal is backed up by a measure to speed up getting housing benefit paid if a job ends after only a short period.
It is not only those of working age who can benefit from simplification. We also intend to prevent pensioners from having to make fresh claims every year and instead institute a simpler review process. We will work with local authorities to develop the detail and discuss the timing of the introduction of these improvements.
Currently, local authorities operate four different schemes to restrict the housing benefit payable to tenants in the private rented sector. The rules have become too complex to administer properly and for clients to understand. We are therefore looking at ways to achieve simplification in this area as well, so as to reduce the administrative burden on local authorities.
The new measures that I have outlined build upon an already considerable agenda for improving administration and tackling fraud. Since 1997, we have been working with local authorities to ensure that we deliver a more efficient and less complex service.
We established the housing benefit improvement programme this year to help local authorities improve their administration. We seek to deliver rapid improvements to the administration of housing benefit and work with local authorities to ensure that this happens, for instance, through setting up the integrated inquiry service, which is a super remote access terminal or RAT. For the first time, remote access terminals—RATs—have allowed local authorities to have an electronic window into Benefits Agency systems to check information. They have been very successful and well used. We want to strengthen the electronic links for information gathering and sharing between the two agencies.
We have established remote access terminals in 404 of the 409 local authorities, providing them with online access to the details of income support and jobseekers'

allowance claims. The integrated inquiry service will allow information to be sent back and forth and more of the DSS systems to be accessible.
We have listened to the problems that local authorities say they face in implementing the verification framework. Already we have introduced greater flexibility. In addition, from 2002 we are splitting the framework into separate parts to allow local authorities to implement it incrementally.
The benefit fraud inspectorate continues to evaluate the performance of individual local authorities, helping them to tackle weaknesses in their benefit services. Nearly 80 reports have been published so far; by next October we will have carried out inspections of around 120 councils which between them account for some 60 per cent. of housing benefit expenditure.
My hon. Friend's local authority, Westminster, was inspected by the BFI earlier this year and the report was published in October 2000. We are currently awaiting the council's response to the report prior to any further action on our part. The report noted several praiseworthy areas, such as Westminster's strong counter-fraud stance and its willingness to improve. However, it also highlighted a large number of weaknesses which will need to be rectified in order to deliver efficient services to benefit recipients. My hon. Friend highlighted a few more in her speech tonight.
First, the benefit fraud inspectorate noted that the management arrangements for delivering benefits in counter-fraud work are too complex and this leads to inefficiencies. Secondly, the contracts with ACIT and Capita need to be more firmly monitored and controlled to incorporate key areas of work such as overpayment recovery and the outcomes of fraud investigations. More needs to be done to clear the backlog of overpayment determinations and speed up the instigation of recovery action. Thirdly, the report stated that claim procedures needed to be improved, for example, by improving the claim form and bringing verification standards up to those of the verification framework. Westminster currently uses its own version of the verification framework which does not meet DSS minimum standards.
There is a need to strike the right balance between building on reforms already made and introducing more change. We have not ruled out making further improvements, but the proposals that I have outlined deliberately focus on areas that we consider could contribute most to easing the administrative burden, promoting work and improving services to claimants. There is never any shortage of ideas for improving housing benefit, but there is a shortage of capacity in local authorities to manage change. That is why we want to focus on quality, not quantity, and work with local authorities to improve the system and its delivery.
I take the points my hon. Friend made about fixed-term periods and the verification framework and we are acting on them. She also mentioned the shortage of money and we have announced some modest increases. We certainly take the point about the number of regulatory changes and are looking at more consistent ways of introducing them.


I would point out, however, that the changes in the single room rent, which my hon. Friend warmly welcomed, require changes in regulations that need to go through the administrative process.
Let there be no mistake: we are determined to improve the administration of housing benefit, working in partnership with local authorities that have the primary

legal duty to administer it. I agree with my hon. Friend that the difficulties currently faced by some tenants and landlords are unacceptable. We have set out our programme of reform and the measures that we have put in place to help local authorities deal with it, and I hope that we will see a rapid improvement.

Question put and agreed to.

Adjourned accordingly at nine minutes past Five o'clock.